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Full text of "New realism: factfinding mission to the People's Republic of China, July 3-13, 1978 : report"

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95th Congress 1 
2d Session J 



COMMITTEE PRINT 



' A NEW REALIS 

Factfinding Mission to the Peopl 
July 3-13, \l 




REPORT 

BY THE 

SUBCOMMITTEE OX ASIAN AND PACIFIC AFFAIRS 

TO THE 

COMMITTEE ON 

INTERNATIONAL RELATIONS 

U.S. HOUSE OP REPRESENTATIVES 




DECEMBER 1978 



Printed for the use of the Committee on International Relations 



35-200 



U.S. GOVERNMENT PRINTING OFFICE 
WASHINGTON : 1978 



r 



COMMITTEE ON INTERNATIONAL RELATIONS 

CLEMENT J. ZABLOCKI, Wisconsin, Chairman 



L. H. FOUNTAIN, North Carolina 
DANTE B. FASCELL, Florida 
CHARLES C. DIGGS, Jr., Michigan 
ROBERT N. C. NIX, Pennsylvania 
DONALD M. FRASER, Minnesota 
BENJAMIN S. ROSENTHAL, New York 
LEE H. HAMILTON, Indiana 
LESTER L. WOLFF, New York 
JONATHAN B. BINGHAM, New York 
GUS YATRON, Pennsylvania 
MICHAEL HARRINGTON, Massachusetts 
LEO J. RYAN, California 
CARDISS COLLINS, Illinois 
CARDISS COLLINS, Illinois 
STEPHEN J. SOLARZ, New York 
HELEN S. MEYNER, New Jersey 
DON BONKER, Washington 
GERRY E. STUDDS, Massachusetts 
ANDY IRELAND, Florida 
DONALD J. PEASE, Ohio 
ANTHONY C. BEILENSON, California 
WYCHE FOWLER, Jr., Georgia 
E (KIKA) DE LA GARZA, Texas 
GEORGE E. DANIELSON, California 
JOHN J. CAVANAUGH, Nebraska 

John J. Brady, 



WILLIAM S. BROOMFIELD, Michigan 
EDWARD J. DERWINSKI, Illinois 
PAUL FINDLEY, Illinois 
JOHN H. BUCHANAN, Jr., Alabama 
J. HERBERT BURKE, Florida 
CHARLES W. WHALEN, Jr., Ohio 
LARRY WINN, Jr., Kansas 
BENJAMIN A. GILMAN, New Yoik 
TENNYSON GUYER, Ohio 
ROBERT J. LAGOMARSINO, California 
WILLIAM F. GOODLING, Pennsylvania 
SHIRLEY N. PETTIS, California I 
JOEL PRITCHARD, Washington 2 



Jr., Chief of Staff 



Subcommittee on Asian and Pacific Affaies 

LESTER L. WOLFF, New York, Chairman 



L. H. FOUNTAIN, North Carolina 
GUS YATRON, Pennsylvania 
HELEN S. MEYNER, New Jersey 
ANTHONY C. BEILENSON, California 

Edward J. Palmer 
Jon D. Holstine, 



J. HERBERT BURKE, Florida 
TENNYSON GUYER, Ohio 



Subcomviittce Staff Director 
Minority Staff Consultant 
Christopher D. W. Nelson, Subcommittee Staff Associate 
James J. Przystup, Subcommittee Staff Associate 
Linda G. Silver, Staff Assistant 



1 Resigned from the committee Sept. 20, 1078. 
» Elected to the committee Sept. 20, 1978. 



<n) 



FOREWORD 



Washington, D.C., December 15, 1978. 
The following report has been submitted to the Committee on Inter- 
national Relations of the House of Representatives by a delegation 
of the Subcommittee on Asian and Pacific Affairs which visited the 
People's Republic of China July 3 to July 13, 1978. The reportjs being 
printed for use by the Congress in its deliberations on matters affecting 
relations between the United States and the People's Republic of 
China. 

The views and findings in the report are those of the congressional 
delegation and do not necessarily reflect the views of the members of 
the Committee on International Relations. 

Clement J. Zablocki, Chairman, 
Committee on International Relations. 

(in) 



LETTER OF TRANSMITTAL 



Washington, D.C., December" J. 5, 1978. 
Hon. Clement J. Zablocki, 
( I 'lirman, Committee on International Relations, 
House of Representatives, 
Washington, B.C. 

Dear Mr. Chairman: The enclosed report, "A New Realism: 
Factfinding Mission to the People's Republic of China," covering the 
period July 3-13, 1978, is hereby submitted to the House Interna- 
tional Relations Committee. 

The members of the delegation were Chairman Lester L. Wolff, 
Representatives L. H. Fountain, J. Herbert Burke, and R. Tennyson 
Guyer, of the Subcommittee on Asian and Pacific Affairs; Representa- 
tives Eligio de la Garza and Larry Winn, Jr., of the International 
Relations Committee; and Representative Charles Rangel of the 
Committee on Ways and Means. Others with the delegation included 
Mr. Edward Palmer, staff director of the Subcommittee on Asian and 
Pacific Affairs, and Mr. Christopher Nelson, staff associate on the 
subcommittee. Upon the delegation's arrival in Shanghai, Mr. Richard 
Bock, Counselor at the U.S. Liaison Office in Peking, joined the 
delegation at our request. 

During the 10-day stay, the delegation visited Shanghai, Peking, 
Sian, and Canton. We met with various Government officials, in- 
cluding Senior Vice Premier Teng Hsiao-ping; Vice Foreign Minister 
Wang Hai-jun; Vice Minister of Foreign Trade Wang Jun-sheng; 
Ambassador Hao Teh-ching, President of the People's Institute of 
Foreign Affairs; Dr. Chou Pei-yuan, Vice President of the Academy 
of Sciences and President of Peking University and many other indi- 
viduals who gave generously of their time, hospitality, and views. 
Ambassador and Mrs. Leonard Woodcock, and their staff at the 
Liaison Office in Peking provided excellent assistance, and helped 
make this mission highly successful. The itinerary of the mission in- 
cluded onsite inspections of factories, hospitals, communes, and 
educational and cultural institutions. 

The primary purpose of this report is to provide the Congress with 
current and personal impressions of the People's Republic of China 
and an evaluation of the changes in China since the fall of the "Gang 
of Four," and the reemergence of Vice Premier Teng. 

The delegation is indebted to Ambassador Han-hsu and his staff 
at the Liaison Office of the People's Republic of China in Washing- 
ton, D.C., for their work with the subcommittee in preparing for the 
mission. The delegation wishes to extend special thanks to Ambassador 
Hao and his staff at the People's Institute, who provided invaluable 

(V) 



VI 

information, escort, and translation services during our visit. The sub- 
committee also wishes to thank Ambassador Leonard Woodcock and 
his staff in Peking, and Counsel General Thomas Shoesmith and his 
staff in Hong Kong for their advice and assistance during and after the 
mission. Dr. Robert Sutter, Congressional Research Service, Library 
of Congress, provided information and written materials to the sub- 
committee which have been of great assistance. Finally, the delegation 
would like to thank Mr. Edward J. Palmer and Mr. Christopher D. W. 
Nelson of the subcommittee staff for their assistance in the planning 
and execution of the mission and in the preparation of this report. 

We hope that the following report will be helpful to the committee, 
the Congress, the administration, and the American people as we 
attempt to develop policy toward normalization of relations with the 
People's Republic of China. 
Sincerely, 

Lester L. Wolff, 
Chairman, Subcommittee on Asian and Pacific Affairs. 



CONTENTS 



Foreword in 

Letter of transmittal V 

Delegation introduction 1 

Principal themes 1 

Key questions 3 

Report'sequence 3 

Delegation conclusions 5 

The normalization process 5 

The Republic of China (Taiwan) 5 

Foreign affairs 6 

Domestic policy, trade, and economics 7 

Delegation recommendations 9 

Delegation report 11 

Purpose of the 1978 mission 11 

Background 11 

1978 mission 13 

Foreign affairs 14 

The Republic of China (Taiwan) 16 

Education, foreign trade, and domestic growth 18 

Supplemental statement of Representative L. H. Fountain 21 

Conversations with PRC officials 23 

Vice President Teng Hsiao-ping 23 

Ambassador Hao Teh-ching 28 

Vice Foreign Trade Minister Wang Jun-sheng 36 

Vice President Chou Pei-yuan, Academy of Sciences 42 

The itinerary 49 

Shanghai 49 

Peking 50 

Sian 52 

Canton 52 

Peking University and Chiaotung University, Sian 53 

Supplementary analyses 57 

PRC foreign policv 57 

Normalization: PRC and ROC 62 

Trade and economic development in the PRC 66 

Modernization: The workers and the peasants 69 

China since the cultural revolution 74 

Appendixes: 

A. Itinerary listing 85 

B. Hong Kong press conference transcript 87 

C. Teng Hsiao-ping interview with Japanese journalists 93 

D. Selected press clippings 96 

E. PRC defense "white paper" 113 

F. Summaries of 1977 normalization hearings held by the Subcom- 

mittee on Asian and Pacific Affairs 122 

G. American Bar Association delegation 128 

(VII) 



Digitized by the Internet Archive 
in 2013 



http://archive.org/details/newrealismfactfiOOunit 



DELEGATION INTRODUCTION 

From July 3 to 13, 1978, the Subcommittee on Asian and Pacific 
Affairs conducted a factfinding: mission to the People's Republic of 
China. Members of the delegation included Subcommittee Chairman 
Lester L. Wolff, Representatives L. H. Fountain, J. Herbert Burke, 
and R. Tenrryson Guyer of the subcommittee; Representatives Eligio 
de J a Garza and Larry Winn of the Committee on International Rela- 
tions; and Representative Charles Rangel of the Committee on Ways 
and Means. 

The delegation represented the first time a formal, standing com- 
mittee of the House of Representatives had been officially invited, as 
a subcommittee, to the People's Republic of China. Our hosts, the 
People's Institute of Foreign Affairs, extended the invitation to the 
Subcommittee on Asian and Pacific Affairs. Previous congressional 
groups had visited China in a private capacity, or through arrange- 
ments facilitated by the executive branch. 

Principal Themes 

In this report, the delegation will describe principal themes which 
emerged from our observations, and from conversations with our 
hosts. Specifically: 

(1) The delegation left the People's Republic of China with a sense 
that what we have termed a "new realism" that encompasses all aspects 
of China's life — its politics, social institutions, economy, and educa- 
tional facilities. 

(2) The rhetoric of the past has been moderated, if not eliminated. 
Mao's "little red book" was not in evidence, and the only theme re- 
peated consistently was the injunction of Chairman Mao to "Let 100 
flowers bloom, let 100 schools of thought contend." During the mission, 
we perceived that this rallying cry of the 1950's had been rehabilitated 
to set the tone for a new atmosphere, one the Chinese hoped would 
stimulate a freer flow of creative ideas and initiatives. Such a renewed 
flow was seen by China's leaders as a way to break the ideological 
straitjacket of the Cultural Revolution, and the rule of the "Gang 
of Four," which had paralyzed China for nearly a decade by inhibiting 
not only popular criticism, but also those officials favoring expertise 
over ideology, and "seeking truth from facts," rather than dogma. 

(3) The delegation felt that the new realism, and the themes of "Let 
100 flowers bloom, let 100 schools of thought contend," also extended 
to the conduct of China's economic and foreign policy, particularly 
China's foreign trade, so that China could once again "learn from 
foreign friends." 

(4) The rationale advanced by our hosts to stimulate China's 
progress in the "Four Modernizations," that is progress in industry, 
agriculture, science, and defense, was the need to resist what was seen 
as the worldwide efforts at "hegemony" by the Soviet Union — the 

(1) 



"Polar Bear." The Chinese stated how meaningful progress had been 
retarded, and the gap between China, the U.S.S.R., and the West had 
been widened, and how much they had to accelerate progress to meet 
the challenges of the decades ahead. 

(5) For the United States, the Chinese constantly warned against 
what they termed "the policies of appeasement." They felt the United 
States was subordinating defense requirements in the face of the real 
and potential threat posed by the Soviets on an international basis. 
This is in contrast to past exhortations which centered on the need to 
concentrate our attention solely in Europe. The Chinese were critical 
of the United States-Soviet SALT talks, and other efforts at pursuing 
"detente." They also warned against "feeding chocolates to the Polar 
Bear," a colorful expression used to ridicule Western pursuit of trade 
and technological exchange with the Soviet Union. 

(6) In contrast to the past several years, the tone of statements 
about the Republic of China (Taiwan) and particularly the Kuomin- 
tang, seemed deliberately low key. The possibility of the PRC's coming 
to an accommodation with the leaders of the KMT was raised as 
having two historical precedents; therefore, we were told "since there 
has already been cooperation with the Kuomintang twice, can you 
rule it out the third time?" 

(7) The leaders of the People's Republic of China made it clear they 
wished to normalize relations with the United States. [Throughout 
this report, "normalization" will be defined as that process including 
or culminating in an exchange of ambassadors between Washington 
and Peking.] But at the same time, People's Republic of China loaders 
repeated their past insistence on American acceptance of the "three 
points" regarding the Republic of China (Taiwan). [By the "three 
points," the United States would be required to withdraw diplomatic 
recognition of the Republic of China, cancel the Mutual Defense 
Treaty with the Republic of China, and withdraw all U.S. troops 
from Taiwan.] 

(8) In return for U.S. recognition of the People's Republic of China 
as the government of all of China, the delegation was told that leaders 
in Peking were prepared to discuss what they termed the "political 
realities" and the "modalities" of a continued American relationship 
with the people of Taiwan. The so-called "Japanese Formula" 1 was 
cited as one possible model for postnormalization relations between 
the United States and Taiwan. Steadfastly refusing to make any com- 
mitments on a peaceful settlement of the Taiwan question, PRC 
leaders stressed they would do their best to create conditions to solve 
this question by peaceful means. 

The delegation has entitled this report "A New Realism: Factfind- 
ing Mission to the People's Republic of China" to describe what it 
perceives as a new realism on China's pail. However, we also seek to 
indicate thai an opportunity exists for a new realism on the part of 
I r.S. policymakers. 

'• The "Japanese Formula" is the term used to describe iho process whereby in 1972 tiio 
Government of Japan formally terminated mi official relations with the Republic of China 
(Taiwan) upon exchanging ambassadors with the People's Republic of China. The Japanese 
replaced their embassy in Taipei with a "private" trade office, which in effect issues visas, 

and carries out nil the duties necessary to facilitate a continued social and economic 

relationship between Japan and Taiwan. Unlike the United states, Japan had no formal 
defense relationship with the Republic of China (Taiwan). 



Key Questions 

Our consensus on this matter should not be interpreted as a blanket 
endorsement of all that we were told, or all that we were expected to 
see in China. Far from it. Delegation members emerged from the 
People's Republic with many questions stemming from their experi- 
ences. Among them: 

(1) Are the current trends we report in China deep-seated, or are 
there likely to be new upheavals, similar to the many change^ which 
have kept the People's Republic of China in political turmoil for 20 
years? 

(2) Is the "new realism" and its possible application to the Taiwan 
situation merely a ploy on the part of China's leadership, designed for 
external, and particularly United States, consumption? Or, is it a 
genuine effort to explore new approaches that recognize the past and 
present relationship of the United States and the Republic of China 
(Taiwan)? 

(3) Does the apparent opening for negotiation on Taiwan perceived 
by the delegation exist because of China's domestic needs for 
modernization? 

(4) Can the United States help keep the People's Republic of China 
in its current posture by helping China to meet her domestic needs? 

(5) Even if the changes now underway in China take root, what 
guarantees are there that they will continue across-the-board, par- 
ticularly regarding China's attitude toward the United States? 

(6) Will cooperation in meeting China's strategic goals reap divi- 
dends for the United States? If so, what dividends? 

(7) Do the possible risks of helping the Chinese meet their strategic 
goals outweigh the possible benefits for the United States? 

(8) Can a relationship, based primarily on perception of a common 
adversary (the U.S.S.R.) endure? 

We recognize that there can be no "10-day experts" on any country, 
much less a land as vast and as complicated as the People's Republic of 
China. But the background available to the delegation in the form of 
the work of the subcommittee over several years, and the excellent 
briefings received prior to the mission, have given us confidence that 
we can report accurately on what we saw and heard. 

Report Sequence 

The above summarizes the principal observations of the delegation. 
The section which follows details the delegation's conclusions and 
recommendations. In subsequent sections, the delegation's full re- 
port is presented, followed by individual members' reports, and 
conversations with leaders of the People's Republic of China, including 
Vice Premier Teng Hsiao-ping. Following the conversations, detailed 
sections on various aspects of PRC policy are included as supple- 
mentary analyses in order to help place into an overall context the 
findings and recommendations of the delegation. Finally, the appendix 
contains press reports, PRC position papers, and other items designed 
to serve as backup material to the report. 



DELEGATION CONCLUSIONS 

Before presenting our principal recommendations, the delegation 
wishes to summarize the conclusions which lead to the recommenda- 
tions. They are: 

The Normalization Process 

(1) The direct statements and cumulative impressions received by 
the delegation are evidence of a clearly positive outlook on normaliza- 
tion by China's leadership. 

— At formal meetings and informal gatherings throughout our visit, 
the delegation was repeatedly told that normalization was a 
desirable- goal and that it was hoped that our visit would help 
facilitate normalization. 

— Economic and strategic advantages to both sides were consistently 
cited by our Chinese hosts as the fruits of normalization. 

(2) The delegation believes that if the normalization process is 
pursued, the positive outlook it perceives can extend to negotiations 
on the modalities of normalization in an atmosphere of respect for the 
positions of the parties involved. 

— Explicit Chinese statements about the potentially negotiable na- 
ture of what were termed the realities and modalities of the U.S. 
relationship with Taiwan led the delegation to feel that the "grey- 
area" necessary for compromise between the hard positions of 
each side might be located by negotiation. 

— The delegation feels that the positive outlook stems from an in- 
creasing perception by the PRC leadership of economic, strategic, 
and political interests which both governments have in common. 

— The treaty of peace and friendship, and the long-term trade 
agreements negotiated in 1978 between Japan and the People's 
Republic of China are of interest as potential guideposts for the 
future. 

The Republic of China (Taiwan) 

(1) The delegation notes the existence and the importance of the 
Mutual Defense Treaty between the United States and the ROC. 

(2) The delegation considers that conversations with the PRC's 
leaders regarding Taiwan and the Kuomintang represent a potential 
opening, and therefore, in the context of an official U.S. congressional 
mission, a new opening. 

— Considering its source, the delegation recognizes the importance 
of the remark that cooperation between the Communists and the 
KMT could not be ruled out because twice, prior to 1949, the 
KMT and the Communists had cooperated. 

— We recognize that the PRC has raised the possibility of negotia- 
tions with the ROC several times since 1949. However, we believe 
that the significant difference in 1978 is the tone and context of 
the discussion, and that domestic PRC policies of pragmatism 
and modernization reinforce the foreign policy and Taiwan 
initiatives. 

(5) 



6 

(3) The delegation concludes that the possibilities for negotiations 
relative to Taiwan, with genuine respect for the positions of all parties, 
appear more favorable now than at any time in the past 20 years. 

— We note such instances as the 1955-56 offers by then-Premier 
Chou En-lai to negotiate a peaceful settlement of United States- 
China differences in the Taiwan Straits. 

— We question whether inaction in the present, or opting for 
the status quo, will help perpetuate the presently favorable 
atmosphere. 

(4) The delegation understands the "three points" of the PRC 
regarding a peaceful settlement of the future of Taiwan. 

— At the same time, the delegation states its support of the 
position that the future well-being of the people of Taiwan, and 
the question of stability in the region, are related, and that they 
rest on maintenance of peace in the region. 

(5) The delegation wishes to state its concern that the resort to 
force by parties on either side of the Taiwan Strait would jeopardize 
stability in the region, and should prompt reassessment by the United 
JStates of its relationship with any party initiating violence. 

— We believe that any invitation to a third party to active involve- 
ment in the question of Taiwan's future would itself jeopardize 
stability in the region, and should prompt reassessment of the 
U.S. position regarding any party involved in such an invitation. 

Foreign Affairs 

(1) The People's Republic of China now perceives the Soviet Union 
to be its preeminent threat. This is in contrast to the past, when the 
United States was seen as an equal, if not greater, enemy. 

— The Chinese now state that the Soviets are a direct threat to 
China, and not just the West, in contrast with the past, and cite 
the Soviet border regions as possible initial areas of conflict. 

— China seeks to build an international alliance of common 
strategic and political interests against what it terms "Soviet 
expansionism," and "hegemony." 

— China believes the Soviet Union is attempting to "encircle" 
the PRC, but that China can break this encirclement (as she 
has other encirclements) by pursuing common interests with 
the United States, the nations of Europe, the Middle East, and 
Asia. 

— Premier Hua Kuo-feng's mission to Europe, European arms 
purchases and economic initiatives, the signing of the Treaty of 
Peace and Friendship with Japan, and a worldwide pattern of 
diplomatic visits are all related to China's efforts to counter 
what it M'es as the Soviet threat. 

(2) The PRC wants the United Slates and its allies to strengthen op- 
position to the Soviet Union in each hemisphere of the world. 

— The Chinese no longer emphasize the NATO alliance as the only 
bulwark against the I'.s.s.K. 

— They consider the U.S. goals of pursuing ''detente through the 
SALT agreements, and increased trade and technological ex- 
change with the Soviel Union to he a policy of "appeasement." 



— They urge upon the United States and the West a three point 
plan of direct political and strategic action to deny the Soviets 
the advantages they now enjoy through "detente" and exchanges. 
The Chinese say their plan would make war between the United 
States and Russia no longer "imminent," but perhaps "post- 
ponable" for as much as 25 years. 

Domestic Policy, Trade, axd Economics 

(1) The PRC is engaged in the "Four Modernizations," an orga- 
nized campaign to upgrade and modernize all aspects of its educational, 
scientific, technological, military, and commercial capacities, and has 
rejected the militant self-reliance policies of the Cultural Revolution. 

— The Hua-Teng leadership is attempting to reestablish and carry 
to conclusion the initiatives begun under then-Premier Chou 
En-lai in 1972-74, prior to Chou's death and the rise of the "Gang 
of Four." 

— In pursuit of these goals, present PRC leadership welcomes 
"learning from foreign friends," and emphasizes "seeking truth in 
facts," rather than making facts fit ideology. 

— As a result, the preeminence of Chairman Mao's sayings and 
writings have been increasingly muted in favor of specific state- 
ments by the current leadership. 

— Mao is now being reinterpreted, if not redefined, to justify a re- 
examination of and criticism of past policies, including the policies 
of Mao himself. 

— Integral to the process of redefining the ideological backing for the 
practical policies now being pursued in criticism of the so-called 
"Gang of Four," led by Mao's wife, Chaing Ching, and also 
criticism of former defense minister and party vice chairman Lin 
Paio, and their supporters. 

(2) The PRC is taking active steps to pursue domestic mod- 
ernization. 

— The announced goal of the PRC, involving potential expendi- 
tures in excess of $100 billion, is to modernize the nation com- 
pletely by the year 2000. Steps in this process include such goals 
as 80 percent mechanisation of agriculture by 19S0 and 120 major 
new industrial projects by 1985. 

— Military missions to Western Europe have already explored sales 
of more than $1 billion for weapons ranging from jet fighter 
engines to antitank missiles. 

— Plans have been announced for United States-China, and a China- 
worldwide student exchange program, eventually involving 
15,000 to 20,000 students of primarily scientific and technical 
subjects. 

— A goal of training 800,000 new scientific research and technical 
workers by 1985 has been set, thus emphasizing educational re- 
form, and exchanges. 

— Large-scale purchases of entire technologies and industries from 
Japan, West Germany, Great Britain, and other nations in the 
vital areas of coal, oil and steel production have been announced, 
involving billions of dollars. 

(3) The PRC is moving toward full participation in the international 
economic and financial system in order to pursue its modernization 
goals. 



8 

— PRC worldwide trade for the first half of 1978 exceeded by 30 
percent trade for the first half of 1977, reaching $19 billion. 

— Credit financing, joint production projects, "payback" develop- 
ments, and direct loans from Japanese banks, have all been 
publicly discussed or announced. 

— Long-term trade agreements, such as one with Japan reported 
to involve $20 billion, have been announced or are under con- 
sideration. 

(4) The delegation was told that expanded trade with the United 
States would be a major fruit of normalization. 

— Chinese leaders indicated that the question of frozen assets 
stemming from the Communist takeover in 1949 was no longer 
considered an obstacle, quoting discussions with U.S. officials 
in recent } r ears. 

— The Chinese said they desired normalization in order to end the 
trade restrictions, particularly certain export controls, which have 
prevented technological sales in recent years. 

■ — PRC leaders indicated that United States-China trade would 
increase, even without normalization, because of China's strategic 
needs. 

— However, Chinese officials indicated that if export restrictions 
are not lifted by the United States, they will feel compelled to 
develop trade with U.S. competitors. 



DELEGATION RECOMMENDATIONS 

Based on the findings and conclusions presented above, the dele- 
gation makes the following principal recommendations: 

(1) The possible implications of China's "new realism" as it affects 
establishing full diplomatic relations with the United States should 
be pursued by the administration in a timely manner. 

- — It has been nearly 7 years since the signing of the Shanghai 
Communique. The question of timing, therefore, is important in 
order that U.S. inaction — or the appearance of inaction — not 
help induce a return to the more inflexible attitudes of recent 
years in China. • 

(2) An active search for the "grey area" between the fixed positions 
of both sides on the Taiwan question should be pursued in light of 
the presently favorable atmosphere perceived by the delegation. 

■ — The 1955-56 offer to negotiate a treaty with the United States, 
combined with informal suggestions to the delegation of willing- 
ness to consider negotiations with the Kuomintang, would seem 
to constitute the boundaries of a "grey area" which could produce 
favorable results, so long as a positive attitude continues to exist 
between Washington and Peking. 

(3) To foster a continued positive attitude on both sides, the United 
States and the People's Republic of China should encourage and 
develop increased exchanges of people and views on official, private, 
and corporate-business levels. 

— Such exchanges, particularly when they are designed to increase 
trade, are both a stimulus to, and an actual component of, the 
normalization process. The delegation feels that a growing trade 
and cultural relationship between China and the United States 
can lead to a genuine bond between our two countries. 

— Specifically, the delegation now formally recommends what it 
has already informally suggested: that the administration send 
the President's Special Negotiator on Trade at the head of an 
official trade mission to China to follow up and seek to expand 
on the initiatives being pursued by private corporations and 
organizations. 

— The delegation urges a realistic and systematic approach to 
expanding United States-China relations, particularly in the 
areas of industrial and scientific exchange, coupled with a care- 
ful analysis of the estimated returns to the United States and its 
interests, particularly in the security area. 

(4) The question of normalization should be based on the common 
bilateral interests and concerns of the United States and the People's 
Republic of China. 

— The delegation notes that despite their harsh statements concern- 
ing Soviet intentions, PRC leaders stressed that normalization 
should not be pursued purely as an anti-Soviet measure. 

(9) 

35-200—78 2 



10 

— The delegation feels that opposition to the Soviet Union is 
inadequate to serve as the foundation for a solid relationship 
between the United States and the People's Republic of China. 

(5) The delegation urges upon the administration the necessity of 
full cooperation with the Congress regarding its normalization plans 
and policies. 

— The work of the subcommittee and its predecessor (the Future 
Foreign Policy Subcommittee) since 1975, including the factfind- 
ing mission of July 197S, has been designed to minimize the pos- 
sibility of divisive debate (as occurred on the Panama Canal 
Treaty) because the Congress and the American people are un- 
familiar with the history and issues involved in normalization, 
including progress, or lack of it. 

■ — In order to avoid unwarranted fears or misunderstandings, the 
component parts or packages of the normalization process must 
be recognized and spelled out, particularly those regarding trade, 
security, and related questions which wull require congressional 
approval, and which in many cases will require congressional 
initiative. 

— The delegation recognizes that normalization is a process which 
may either begin with, or culminate in, an actual exchange of 
ambassadors, and that the decision regarding this exchange rests 
with the Executive, but that its implementation must be a shared 
process with the Congress. 



DELEGATION REPORT 

Purpose of the 1978 Mission 

The 1978 mission of the Subcommittee on Asian and Pacific Affairs 
was planned as a followup to the then recently completed fall 1977 
hearings on the practical implications of normalization with the PRC. 
The delegation desired to see firsthand the effects of changes in China 
since the fall of the "Gang of Four, ,, the accession to power of Pre- 
mier Hua, and particularly the influence of Senior Vice Premier Teng 
Hsiao-ping, whose pragmatism has been his characteristic for the 
past 25 years, 

In planning the itinerary with the liaison office of the PRC in 
Washington, D.C., the delegation's purpose was to see and experience 
within the limitations of a 10-day visit as wide a cross section of China 
as possible — the people, the culture, the industry, commerce and 
agriculture, and political leadership. 

A number of changes had occurred in China since 1976. The "smash- 
ing" of the "Gang of Four" and the rehabilitation of Teng Hsiao-ping 
were two key shifts. The delegation wished to assess the extent of 
impact of the leadership of Premier Hua and Vice Premier Teng. 

Furthermore, the delegation felt that the issue of the future of 
Taiwan, which has served as the principal stumbling block to fulfill- 
ment of the policy goals outlined in the Shanghai communique, 
should be explored in an atmosphere free of the attitudes and rhetoric 
of the "Gang of Four" and their followers. 

On the eve of its departure, the delegation held the general view 
that for economic, political, and strategic reasons, normalization 
between the United States and the People's Republic of China was an 
important question to be addressed. 

At the same time, the need to achieve normalization without endan- 
gering the well-being of the people of Taiwan remained a parallel 
concern. In these views, the delegation reflected the opinions of the 
Congress, the American people, and each administration since 1972. x 

Background 

As background to this report of the 1978 mission, two previous 
investigations of the PRC will be highlighted: 

(1) The 1976 study mission of Chairman Wolff and Republican 
Burke; 2 

1 Opinion poll by Potomac Associates, Inc., Washington, D.C., 1977. Perhaps the most 
systematic of recent polls on this issue, the Potomac Associates findings mirrored, and 
have subsequently been reflected in polls by a variety of professional organizations. 

2 "United Statos and China: Future Foreign Policy Directions," Subcommittee on Future 
Foreign Policy, USGPO, 1976. 

(ID 



12 

(2) The 1975-76, and 1977 series of 14 hearings on normaliza- 
tion with China held by the Subcommittee on Asian and Pacific 
Affairs. 3 

THE 1976 MISSION 

The 1978 delegation met and talked with the leaders of a China 
which was in many ways quite different from the country previously 
visited by Chairman Wolff and Representative Burke in 1976. At that 
time, China was in the grip of the now discredited "Gang of Four." 
In 1976, the previous delegation met with then Senior Vice Premier 
Chiang Ching-chiao, and heard from Chinese officials at all levels a hard 
line on self-reliance and isolation from external influences. This deter- 
mined isolation extended to all of the vital issues surrounding normali- 
zation, particularly regarding the Republic of China (Taiwan). 

This matter, Representatives Wolff and Burke were told in 1976, 
was purely China's internal affair, in which no external interference 
would be permitted or even discussed. 

Thus, in contrast with the present, there was very little solace in 
1976 for those members who sought recognition by the PRC that the 
United States might have strong concerns regarding the ultimate des- 
tiny of Taiwan and her people. 4 

The 1976 delegation was told repeatedly that the PRC neither 
wanted nor needed the outside world. The Soviet Union was then — as 
it is now — perceived as China's principal enemy. But in 1976, no direct 
assistance from the West was seen as necessary for China to with- 
stand the threat of the "Polar Bear." 

By 1976, the grip of the cultural revolution had passed its peak, 
but many aspects of Chinese life from universities to factories, from 
communes to urban apartment complexes, were still captive of the 
revolution's rhetorical, and political strait jacket. For 10 years, this 
movement virtually halted the scientific, technical, and educational 
progress occurring in the West, and which was being enjoyed by many 
of the PRC's Asian neighbors. 

There were some relatively positive aspects. The "Gang of Four'' 
apparently still sought the goal of normalization discussed in the 
Shanghai communique by Chairman Mao and the then recently 
deceased Premier Chou En-lai. Also, the "Gang of Four" desired at 
least indirect Western assistance in order to divert Soviet resources 
to the NATO flank in Europe, thus lessening pressure on the Sino- 
Soviet border. 

1977 SUBCOMMITTEE HEARINGS 

In September and October 1977, the Subcommittee on Asian and 
Pacific Affairs held a series of six hearings on the practical implications 
of U.S. Government policy since the signing oi the Shanghai com- 
munique. The question pursued was not whether, but when, and how, 

■ "The United Btatea-Sovlel Union-China ; The Great Power Triangle, " USGPO, 197C. and 

"Normalization of Relations With the People's Republic of China: Practical Implications," 

USGPO, 1977, hearings held by the Future Foreign Policy Subcommittee, and its buc- 

. the Subcommittee on Asian and PadflC Affairs, House International Relations 

Committee. 

'in November 1976, Representative Fountain, with Representatives Sam Gibbons and 
Robert Lagomarslno, and then-Chairman Thomas B. Morgan <>f the International Relations 
Committee, visited the Republic of China (Taiwan). In their report, entitled "Outlook on 
The Far Bast, November um;." USGPO, December it>7(>, the members urged retaining 
formal diplomatic and military relations with the KOC. 



13 

to pursue normalization with the People's Republic of China 5 in terms 
of the interests of the United States. 

These hearings were a follow up to the 1975-76 hearings 8 and the 
1976 factfinding mission. They highlighted the fact that, no matter 
what the international economic, political, and strategic situation, the 
prime concern over the issue of normalization with the PRC revolved 
about the question of Taiwan's future, and the many business, tech- 
nical and legal matters surrounding that issue. Specifically, the 22 
witnesses in 1977 testified repeatedly that the key question involved 
both the intent and present function of the Mutual Defense Treaty, 
generally regarded for the past 24 years as the only reliable source 
of international security for the people of Taiwan. 7 

For example, witnesses favoring continuation of the Mutual De- 
fense Treaty testified that only its protective cover would provide the 
security that international business concerns required to continue 
operating in Taiwan. It was suggested by some that the Japanese were 
able to negotiate their "formula" with Peking precisely because of the 
protective umbrella of the United States and its continuing relation- 
ship with Taipei. 

Given the PRC's theme of self-reliance, and pre-1978 policies re- 
garding credit or long-term financing, witnesses generally felt that with 
or without normalization, anticipated U.S. trade with China could not 
be expected to increase substantially. U.S. trade with Asia now ex- 
ceeds that with Europe. But some witnesses expressed doubt whether 
U.S. -PRC trade would ever amount to the two-way street enjoyed 
by the United States and the other nations of Asia. 

Some experts on strategic questions testified during the 1977 hear- 
ings that uncertainty over possible Sino-Soviet rapprochement should 
serve as a counter to other experts who urged normalization as an 
anti-Soviet move in the world arena. 

In the main, though, those witnesses in favor of normalization with 
the PRC did so on the basis of specific bilateral concerns between the 
United States and China. Such witnesses urged that if normalization 
could be accomplished it should be done in an atmosphere free of 
actual or implied threats to the Soviet Union. 

1978 Mission 

During 10 days in July 1978, the delegation traveled some 2,600 
miles and visited 4 cities in the People's Republic of China. 8 Detailed, 
frank, and open exchanges were held with Senior Vice Premier Teng 
Hsiao-ping, Vice Foreign Minister Wang Hai-jun, Mr. Wang Jun 
Sheng, Vice Minister for Foreign Trade, Ambassador Hao Teh- 
ching, president of the People's Institute for Foreign Affairs, Dr. Chou 
Pei-yuan, vice president of the Academy of Sciences and president 
of Peking University, and many other individuals who gave generously 
of their hospitality, time, and views. 

Since the 1976 visit by Chairman Wolff and Representative Burke, 
many new faces had appeared in Peking. As noted, the "Gang of Four" 
had been "smashed," and Teng Hsiao-ping had been rehabilitated for 

5 "Normalization of Relations With the People's Republic of China : Practical Impli- 
cations," hearings before Subcommittee on Asian and Pacific Affairs, USGPO (1977). 

6 "The United States-Soviet Union-China : The Great Power Triangle," Subcommittee on 
Future Foreign Policy, USGPO (1976). 

'- Summarized testimony from each hearing appears in the appendix. 
8 See appendix A for itinerary. 



14 

the second time, now sharing power with Chairman Mao's handpicked 
successor, Premier Hua. But the changes the delegation both witnessed 
and sensed as being under debate appeared far deeper than simple 
shifts in the corridors of power in Peking. 

The delegation came out of China with both individual impressions 
and factual findings which cast light on the key concerns of the 
American people regarding the normalization question. The resulting 
distillation of meetings between the delegation and China's leadership 
should help illuminate many of the questions raised by the sub- 
committee in 14 hearings over the past 3 years. 

As noted in the press conference 9 in Hong Kong, just 48 hours after 
crossing the border from Canton, and as was discussed again with 
Secretary Vance and Assistant Secretary Holbrooke in Washington, 
the delegation emerged from the People's Republic of China with 
the sense that a "new realism" was beginning to assert control of 
affairs in that great land through the pragmatism of Vice Premier 

Ten S- 

Much of what was seen and heard in China was not new in itself. 

But the tone and context of what the delegation was told and shown 

quickly built in the delegation a strong sense of the pragmatic hand 

of Senior Vice Premier Teng in the day-to-day life of China. This 

was particularly evident in the areas of foreign policy and economic 

development, which the Chinese now see as closely related. 

Certainly no visit of only 10 days could qualify any group as expert 

on the policies of or events in another nation, especially a society as 

closed to independent inspection as China. But the delegation had 

the benefit of considerable background experience, as previously 

described. Consequently, the delegation feels that what it perceived 

to be the "new realism" now growing in China will bear close study 

in the future. 

Foreign Affairs 

It is in the area of foreign affairs that China's "new realism" would 
appear to have its most obvious roots. It is a convincing rationale for 
explaining wiry the leaders of China seem determined to modify — if 
not turn away from — the policies and strict ideologies of the recent 
past. 

At all levels of discussion on foreign affairs, the need to meet and 
resist what was termed "Soviet expansionism" was the common 
theme, and, therefore, the motivation, for China to upgrade her 
scientific, technical, and military capacities. In this limited sense- 
definition of the Soviet Union as the arch foe — China of 1976 and 1978 
merge into one. But the differences in approach in 1978, both, at 
Li and abroad, are striking, and warrant closer scrutiny. 

In general, the delegation emerged from China with a definite 
sense of the critical strategic and political problems facing the People's 
Republic of China in the form of the Soviet Union — the "Polar 
Bear"— and what the Chinese Labeled the Soviet Union's "Asian 
Cuba," Vietnam. 

NORMALIZATION URGED 

Bowever, on the basis of its conversations with China's leaders, 
the delegation feels licit while China seeks an acceleration of normali- 
zation with the United States ns ;m integral part of its struggle 

• Preii conference transcript is presented in full in the appendix. 



15 

against the Soviet Union, the leaders in Peking do not want normali- 
zation to be played as "the China card," that is, as an anti-Soviet 
move. Instead, they stressed repeatedly what they termed the common 
strategic and political interests of the United States and China. 

Thus, they said, the best path to normalization with the United 
States lay in fostering a climate of mutual understanding and coopera- 
tion, particularly in the economic, scientific, and educational fields 
which are vital to China's modernization plans. 

The delegation was informed by the Chinese leadership that the 
Soviet Union feared two actions by the PRC — normalization with 
the United States, and conclusion of a treaty of peace and friendship 
with Japan. As this report was written, word of a successful conclusion 
to the negotiations on a Sino-Japanese peace treaty was released. 10 

The delegation was told that the Soviet Union seeks to bring China 
to its knees by a policy of encirclement. Further, the Chinese 
warned, the United States should not be deceived by Soviet attempts 
to "bluff" the West into thinking that the Sino-Soviet split could be 
healed, so deep are the political and strategic divisions between them. 
Nor, said the delegation hosts, should the Soviets be allowed to 
bluff us into thinking that differences between China and the United 
States would prompt rapprochement between Moscow and Peking. 

DIKECT SOVIET THREAT 

Two major developments merit close study, should they continue; 
first, PRC leaders laid heavy stress on Soviet "encirclement" of China, 
and second, the Delegation was told of the threat of a major Soviet 
attack on China. In the past, Peking had seen Moscow as merely 
"operating" against China in Asia while actually preparing for all- 
out war against the United States and the NATO alliance. But now, 
China herself is publicly discussed as a possible first target for the 
Soviet Union. 11 

Another subtlety with possibly broad policy implications is that 
no longer did the delegation hear the old 1976 refrain that war between 
the United States and the Soviet Union was "imminent." Instead, 
the Chinese urged a three-point program of being tough and con- 
fident with the Soviets as the best way to resist them. 12 If the United 
States followed these "three methods," war could be "postponed" 
for as much as 25 years, if not indefinitely. 

The importance of this new line would seem to be that Chinese 
leaders now recognize that they need time, perhaps as much as 25 
years, if they are to progress to a point of being able to compete with 
the flourishing economies of the West, not to mention the economic 
and military might of the Soviet Union. 

10 Subsequent events included an announcement by Vice Premier Teng that the 1950 
Sino-Soviet treaty, which included anti-Japanese references, would not be renewed upon 
its expiration in 1979. 

11 The appendix to this report includes a lengthy article by Hsu Hsiang-chien, a senior 
People's Liberation Army official, discussing in much harder terms the full range of 
Chinese strategic and military thinking, and the conflict between '•socialism," "revisionism." 
and "imperialism." The entire document has been reproduced because of its comprehensive 
nature, which approaches a virtual "White Paper" on PRC theory and strategy. 

: - The delegation was urged repeatedly to support the "three methods" of resisting "Soviet 
expansionism." The three methods : 

(1) Make concrete preparations against war; have no illusions. 

(2) Upset all Soviet efforts at strategic deployment. 

(3) Do not adopt a policy of appeasement toward Russia. 



16 

It was also clear to the delegation that the Chinese recognize the 
need for U.S. cooperation, in Europe and Asia, principally, but also 
in Africa and the Middle East, in order to stem what they see as the 
tide of "Soviet expansionism." The Chinese repeatedly sketched a 
world map showing Soviet activity — and gains — from Cuba to Africa, 
up to the Middle East via South Yemen, into Afghanistan, and across 
to Vietnam. 

Again and again, the delegation was told that the Chinese consider 
the policy of pursuing "detente" with the Soviet Union to be an 
illusion, and that the United States is actually following a policy of 
"appeasement." As noted by Ambassador Hao, and others, the 
Chinese saw no utility in the SALT talks, and even opposed "feeding 
the Polar Bear chocolates" in the form of increased trade and tech- 
nological exchange. 

The Republic of China (Taiwan) 

While many issues were discussed, the question of Taiwan — to 
date, the primary question in the U.S. debate on normalization — is 
perhaps the key area where the delegation felt a potentially important 
example of the "new realism" was being applied by China's leaders. 

The basic Chinese position regarding the need for U.S. adherence 
to the principles of the Shanghai communique, and to the "three 
points" — (1) ending formal recognition of the Republic of China 
(Taiwan) ; (2) abrogating the Mutual Defense Treaty between the 
United States and the Republic of China; and (3) withdrawing all 
U.S. forces from Taiwan — has not altered. However, the delegation 
sensed a new realism in terms of an emphasis on seeking ways to 
settle the Taiwan question on a strictly bilateral basis, between the 
•Chinese themselves. 

In this regard, and in contrast to 1976, the talk was not in terms of 
harsh rhetoric about the rulers of Taiwan, or thinly veiled hints about 
ultimate resorts to force. Rather, the delegation perceived a growing 
Chinese willingness to discuss Taiwan's future even with officials of 
of the Kuomintang, on the basis of what were termed existing realities. 

NO RANCOR 

The delegation was even informed that Chiang Ching Kuo, President 
of the Republic of China (Taiwan), had been a "classmate" of senior 
PRC officials. No rancor toward Taipei's leaders was manifested 
od a personal level during the delegation's talks. Historical instances 
of BlMT-Communist "cooperation" were discussed not once in pass- 
ing, but were specifically raised twice, with the comment, can you 
rule it out a third time? In addition to these potentially favorable 
references to the KMT — unprecedented in any previous conversations 
with PRC leaders — conversations with senior Chinese officials beard 
repeated references to recognition of the "realities" of the U.S. 
involvement on Taiwan. The delegation was told that within the 
context of the Shanghai communique, the "modalities" of normaliza- 
tion were negotiable. 

Linking these thoughts to the stated willingness of the Chinese to 

accept the SO-Called ''Japanese Formula" of trade and economic ties, 
hnt without formal diplomatic recognition of Taiwan as the ffQVern- 

ment of China, the delegation felt that a clear pattern of willingness 



17 

to discuss Taiwan with the United States was being exhibited. The 
striking contrast between 1976 and 1978, is that in the past, any sort 
of discussion on Taiwan had been ruled out on the basis that it was 
solely China's "internal affair." 

SHIFT ON TAIWAN 

That a shift has occurred would seem borne out by the fact that in 
the preceding 6 months, similar pronouncements had been made to 
other delegations. 

(1) In December 1977, for example, Party Chairman Yeh Chien-ying 
noted that China is relying, as he put it, on the people of Taiwan to 
liberate themselves. While not ruling out the possible use of force, 
Yeh's statement would seem to move away from discussing force in 
any provocative way. 13 

(2) In January, Ambassador Hao told the mission led by Senator 
Cranston and Representative Whalen that China recognized what 
were termed domestic "problems" in the United States with respect 
to Taiwan. 14 

(3) In April of this year, a lead article in a Peking daily quoted the 
late Chou En-lai's desire for peaceful liberation of Taiwan. 13 

(4) Finally, the friendly tone of the conversations held by the dele- 
gation were anticipated by Chairman Yeh in May, when he greeted a 
visiting delegation of former American Foreign Service officers, 16 and 
called for "peaceful and friendly cooperation between China and the 
United States," particularly on the normalization question. 

It was within this context that the delegation heard repeated refer- 
ences by the Chinese to past cooperation with the Kuomintang. The 
historical fact was raised that twice in the past the Chinese Communist 
Party and the Kuomintang had come together and cooperated when 
it was in their common interest : First, during the time of Dr. Sun Yat 
Sen and the Northern Expedition against the old warlords, and also- 
against the Japanese to achieve liberation before and during World 
War II. 

PEACE OFFER 

As observers have pointed out since the delegation's return, since 
1949, the Chinese have sent several signals on willingness to negotiate' 
the Taiwan question. One of the more explicit examples would seem 
to be of some potential relevance: 

In 1955-56, at the height of the Eisenhower-Dulles polic}^ of "con- 
tainment" against "Red China," Peking made repeated public efforts 
to bring the United States to the negotiating table. Peking even offered 
the prospect of a treaty specifically calling for peaceful settlement of 
the Taiwan issue in terms of United States-China bilateral relations. 
Then-Secretary of State John Foster Dulles rejected the Chinese 
initiatives, although several talks were held in Geneva. 

The language of the PRC during this period is of interest today. For 
example, on March 4, 1956, the Foreign Ministry in Peking issued a 
statement including this clause : 



13 Yeh's remarks in a speech to the Chinese People's Political Consultative Conference 
on Dec. 27, 1977, were replayed in Foreign Broadcast Information Service Daily Report, 
People's Repuhlic of China, Dec. 29. 1977, pp. E1-E6. 

i4 "The United States and the People's Republic of China," joint House-Senate report, 
USGPO, May 1978. 

13 Kwangniing Daily, Apr. 10, 1978, replayed in Foreign Broadcast Information Service 
Daily Report, People's Republic of China, Apr. 26, 1978, pp. E8-E12. 

16 New China News Agencv, May 19, 1978. replayed in Foreign Broadcast Information 
Service Daily Report, People's Republic of China, May 22, 1978, pp. A6-A7. 



18 

(The Chinese side) put forward as early as September, 1955, the proposal for a 
Sino-American Conference of Foreign Ministers to settle the question of relating 
and eliminating tension (between the United States and China) in the Taiwan area. 
It did not oppose the American proposal for issuing an announcement of renunciation 
of force by both sides. [Italic supplied.] 

Three paragraphs later, the Foreign Ministry statement repeats 
the same theme, this time actively endorsing the U.S. position, saying, 

China and the United States should settle disputes between the two countries by 
peaceful means without resorting to the threat or use of force, and that in order to 
realize this common desire, a Sino-American Conference of Foreign Ministers 
should be held to settle through negotiation the question of relaxing and eliminating 
tension in the Taiwan area. [Italic supplied.] 

The Foreign Ministry statement later credits with the inspiration 
for this initiative then-Premier Chou En-lai. In an April 1955 speech 
at the Bandung Conference, Chou proposed, 

that China and the United States should sit down and enter into negotiations. 
* * * (the Premier) stated definitely that the aim of the negotiations should be to 
settle through negotiation the question of relaxing and eliminating tension in the 
Taiwan area. [Italic supplied.] 

In 1955-56, the Chinese were serious, it is now agreed. The possi- 
bility of a 1978 ploy on the Chinese part, is, of course, present. But 
the preponderance of evidence available to the delegation would 
seem to indicate a general pattern in line with China's historical 
practice. In 1955-56 the United States was China's "encircler." In 
1978, the Chinese see the Soviet Union in this role. In 1955-56, the 
Soviet Union was even then backing off its support of China. In both 
1955-56, and 1978, the response of the leadership in Peking to outside 
pressure has been to seek to alleviate it by improved relations with 
the United States. In 1978, improvement is the stated policy of the U.S. 
Government, and has been since the signing of the Shanghai com- 
munique in 1972. 17 

It goes without saying that the events of 25 years ago cannot be 
uncritically resurrected today. Further, in 1955-56, as in 1978, 
Peking was very clear on the issue of "sovereignty" over Taiwan. 
Premier Chou's offers were carefully couched to clearly separate United 
States- People's Republic of China from United States-Republic of 
China (Taiwan) and Peking-Taipei relations. 

1978 CONTEXT 

The point here is that indications of possible openings on Taiwan 
during the delegation's August visit — friendly references bo Chiang 
Ching-Kuo, and talk of past cooperation with the KMT — came in 
the context of meeting with an official U.S. congressional delegation. 
While clinging to the "soverignty" issue as a shield against specific 
Statements OD a peaceful settlement on Taiwan, the fact remains that 
key PKT leaders told the delegation "we will do our best to create 
conditions to solve this question by peaceful means." There was obvious 
recognition by the Chinese of the domestic United States and inter- 
national "audience" which would receive the delegation's report. 

Education, Foreign Trade, And Domestic Growth 

The delegation's general perception of China's "new reality" was 

reinforced by visits to educational facilities, cultural events and 

w For contemporary dliciiiiion of the 1958 •"»<". Chinese »>flr<>r, see "Toward Slno-Amerlcan 
Reconciliation" i»y it. Robert o. Sutter, Johni Hopklni (Jnirenlty Preu, i'jts. 



19 

institutions, and factories. At locations ranging from Peking Univer- 
sity to a technical university in rural Shensi Province, teachers and 
officials repeated the same themes; that the damage done by 10 
years of stag-nation during the cultural revolution, and solidified by 
the extremes of the "Gang of Four," had set China back years in 
scientific and technical education and research, and seriously retarded 
industrial production, modernization, and economic growth. 

The principal difference between 1976 and 1978 is that now the 
Chinese have recognized that placing ideology ahead of practice has 
retarded progress. They were frank in their willingness to open up to 
Western scientific technology and training to enhance, if not replace, 
Chinese technology. 

TRUTH IX FACTS 

This does not to imply that ideology has been abandoned. But the 
Chinese made it clear that a return to practice, a return to profession- 
alism, will be the key determining factor in determining who is "red 
and expert." They now want to "seek truth in facts," a well-known 
saying of Vice Premier Teng aimed directly at what the Chinese press 
calls "whateverism," a wry swipe at proponents of the view that 
"whatever Mao said or wrote is correct." 

That there is an emerging Chinese pragmatism, particularly in the 
field of education, would seem to be clear. In January, for example, 
Dr. Chou Pei-yuan, vice president of the Academy of Science and 
president of Peking University, told the Cranston- Whalen delegation 
that there would be no possibility of United States-China exchanges 
until after normalization. 

But in March, Dr. Chou joined with Vice Premier Teng in announc- 
ing the 1985 goal of training 800,000 new research personnel. Surely 
it was no accident that the President's White House science advisers 
were in Peking at the same time as the Wolff delegation, or that Dr. 
Chou and other officials subsequently announced an extensive, new 
student exchange program. 

Dr. Chou was very frank in his conversation with the delegation on 
the need to upgrade China's educational system from top to bottom. 
Clearly, the Chinese realize they cannot hope to achieve these goals 
without cooperation from the West. 

At the university level, ranks for professors, grades for students, 
and entrance exams for prospective students have already been 
restored, although only in the past 6 months. The Chinese were open 
in their hopeful, if not skeptical appraisal of the benefits of the "new 
realism" for China's renewed progress. 

The Chinese are now instituting wage incentives, restoring rank in 
the military, and using other methods to spur discipline, efficiency, 
and greater production. 

It is precisely changes of this nature which were advocated by Teng 
Hsiao-ping and his followers prior to their purge by the "Gang of 
Four." The future of these changes is still not certain. 

While the role of ideology and rhetoric should not be underplayed, 
the only rhetoric heard consistently throughout the visit was the old 
injunction of Chairman Mao to "Let 100 flowers bloom, let 100 
schools of thought contend." This mild-sounding exhortation, if 
allowed to flourish, contains the seeds for a far-reaching revolu- 
tion in China's administrative style and policy. The delegation was 



20 

consistently told that this old rallying call of the 1950's had been 
resurrected to permit constructive expression of thought and ideas in 
order to stimulate the progress which the Chinese frankly admit 
they must make. (The fate of the 1950's campaign, sometimes char- 
acterized as China's "Prague Spring," was not discussed.) 

FOREIGN TRADE 

The Chinese now state that foreign trade is an important part 
of the domestic expansion program which they have adopted for 
the future. Wang Jun-sheng, Vice Minister for Foreign Trade, made 
clear his government's desire that obstacles to export licenses for 
certain types of U.S. technology be removed "in the spirit of the 
Shanghai Communique." The Minister dismissed as "not an im- 
portant problem" the longstanding issue of frozen assets, and pre- 
dicted that after a 2-year decline, United States-China trade would 
increase this year. However, the Minister stressed repeatedly that 
trade restrictions exist in the form of the CoCom agreements, 18 and 
certain export license denials on technology with potential military 
applications. China would look elsewhere for trade if U.S. restrictions 
are not lifted, he added. 

U.S. TRADE MISSION 

In return, the delegation suggested that the time was ripe for 
greater official U.S. trade consultations with China, and discussed 
the need for sending a trade mission equivalent to the White House 
science adviser's group which was in Peking at the same time as 
the delegation 

Subcommittee Chairman Wolff raised the possibility of joint ven- 
tures between Chinese and American companies which could employ 
the technology and expertise which are presently blocked by export 
license restrictions not necessarily aimed at China in the first place. 

Minister Wang candidly stated the new Chinese policy to pursue 
modernization with outside help, "to learn from foreign friends." 
where necessary. He then added the thought, "It is certain that a 
powerful China will be of benefit to the United States in a threat. 
This is in your strategic interest." 

The discussion then focused on oil exploration, and the Minister 
noted that "a number of U.S. companies have (recently) come to 
China to exchange views." It should be noted that while our delega- 
tion's conversation with the Minister was similar in tone to that held 
by the Cranston-Whalen mission in January; namely, that trade 
would have to wait for normalization — the fact was that the Chinese 
had spent the past (> months seeking U.S. technology, particularly 
in the oil and energy field. 

U.S. BUSINESSMEN 

Staying in the Peking Hotel at the same time as the delegation 
were representatives from several major U.S. oil companies. The de- 
tails of (heir- plans for mutual cooperation with China Subsequently 

for "coordinating committee," is ;i forma] procedure designed t<> 
oxjM.rt of strategic technology to a Communist nation without the approval of all of the 15 
members 'ii<> United states. Japan, and the NATO nations excluding Iceland. France is 
not a member of CoCom, and in October. :i proposer] $350 million sale of antiaircraft and 

antitank weapons from Franec to the PEC wai revealed. 



21 

appeared in the press. 19 Of particular interest to the delegation was the 
indication that the Chinese were now prepared to enter into produc- 
tion-sharing agreements with the U.S. companies, and that the con- 
cept of profit-sharing has apparently not been ruled out. 

While in Peking, delegation members and staff met informally with 
U.S. business executives. These conversations reinforced the percep- 
tion of China's new pragmatism. The businessmen reported that 18 
months ago their contact with midlevel Chinese officials had produced 
only generalities, and discussion of technical manuals or prototype-. 

But this year, said the businessmen, the same midlevel officials 
were authorized to engage in price negotiations on packages of equip- 
ment with potential sales in the millions of dollars. 

The businessmen reported discussions involving agricultural train- 
ing programs in which U.S. technicians would be supplied for a fee, 
and in what may represent a major shift from past policy, the Chinese 
indicated an appreciation of cost and profit centers in negotiating 
with the foreign companies. 

In the delegation's meeting with Vice Foreign Trade Minister 
Wang, the Minister said that since the signing of the Shanghai com- 
munique in 1972, China's policy has been to develop trade "on the 
basis of equality and mutual benefit." Conceding that the "Gang of 
Four" hindered implementation of this policy, Minister Wang said 
"we have now entered into a new epoch of construction, and we have 
a greater need to develop international trade and to expand trade. 
We need to import commodities in large quantities, and at the same 
time we need to increase our exports." 

Citing "consumer goods" and "light industrial products" as im- 
mediate possibilities, Minister Wang added "* * * some minerals 
and metals. Also, if we develop our oil production, we could possibly 
supply some oil to you." 

It seemed to some members of the delegation that China had 
embarked on a policy of using oil exploration as a pilot project in 
cooperation with foreign business firms, as well as international 
financial institutions. 

In the interval since our mission, the trends we perceived have 
solidified into a solid stream of hard policy being implemented by 
Peking, ranging from oil and arms deals, to massive tourist hotel 
projects. 

Supplemental Statement of Representative L. H. Fountain 

While I am in general agreement with the recommendations of the 
delegation, I want to take this opportunity also to reaffirm my long- 
st am ting interest in maintaining cordial relations with our historic 
friend and ally, the Republic of China. As I have stated on past oc- 
casions, 1 favor continued diplomatic recognition of the Republic of 
China and preservation of the Mutual Defense Treaty. I oppose 
sacrificing Taiwan as the price of achieving normalization with Peking, 
and hope that it will be possible to move toward full diplomatic rela- 
tions with the PRC without impairing our historical friendship with 
the ROC. 



19 Washington Post article "China's Oil" by Hobart Rowen, Aug. 11, 197S. 



CONVERSATIONS WITH PRC OFFICIALS 

Meeting With Senior PRC Officials Including Vice Premier 
Teng Hsiao-ping, Vice Foreign Minister Wang Hai-jun, and 
Ambassador Hao Teh-ching, Peking, Great Hall of the 
People, Sunday, July 9, 1978, 10 a.m. 

The l-hour-and-45-minute conference opened with Chairman Wolff 
and Vice Premier Teng discussing the 1976 visit to Peking by Mr. 
Wolff and Representative Burke, and the differences between that 
visit and the present. 

On the Chinese side, the thought was expressed that such visits 
were useful and that an exchange of views, even where they differed, 
was important. "Mutual understanding between us is better than no 
understanding at all," commented one participant. 

The cordial nature of the delegation's discussions were reflected 
in an exchange between Chairman Wolff, Representative Rangel, and 
the Chinese officials present. One official commented on his own 
military experience, and noted that delegation members had also 
seen military service. 

Representative Rangel said "Some of us prefer to forget our mili- 
tary experience, such as in Korea." The response, amid laughter, 
came back, "You should not forget completely." Representative 
Rangel, noting he had been wounded and sent back to the United 
States shortly after reaching the Yalu River, said "Completely for- 
getting is impossible." The Chinese response, bantering in nature, 
was "It is better to forget certain matters like the advance of U.S. 
troops to the Yalu River. These matters are better to forget. But," 
the reply took on an earnest tone, "the military question is still a 
very real one." 

Discussion moved swiftly to the military situation in Asia, and a 
discussion of the two administration visits to Peking, that of Secre- 
tary Vance in August 1977, and National Security Adviser Brzezinski 
in 1978. 

RECENT visits 

Representative Wolff said "We came here to help find ways and 
means of how we, as nations and people, can come together. I think 
there are more areas we can agree upon than there are areas of dis- 
agreements." Turning to the issue of PRC criticism of Secretary 
Vance following post-mission reports of Chinese flexibility on the 
Taiwan question, Representative Wolff noted that Mr. Brzezinski's 
visit produced no such negative appraisal on the part of the PRC. 
"Do you think that the Brzezinski visit represented progress in our 
relations which exceeded that of the visit by Secretary Vance? What 
are the areas we can pursue more closely as a result of our trip?" 

(23) 



24 

During the discussion of these questions, the Chinese side expressed 
the view that the results of both the Vance and Brzezinski vists 
were the same in terms of the U.S. commitment to normalization 
within the framework of the Shanghai communique. The thought 
was expressed that normalization depends on efforts by both sides. 
The only area of disagreement from Secretary Vance's visit was de- 
scribed by Chinese officials as stemming from statements on "flexi- 
bility" regarding the principles of the Shanghai communique. These 
statements, according to the Chinese, were "incorrect." 

The only difference between China and the United States, the con- 
versation indicated, was the question of Taiwan. While the officials 
indicated that the firm Peking position on sovereignty remains China's 
policy, the comment was made that despite the difficulties of the 
Taiwan question, it remains a question which can be "talked out" 
between China and the United States. 

SOVIET UNION 

The discussion shifted to the interests seen by the Chinese as com- 
mon in United States-China relations, specifically, coordinating action 
to meet the challenge of the Soviet Union. "I believe we as well as 
you will have a more active attitude toward settling the question of 
normalization of relations. There is a need for this because there 
nre compelling circumstances," commented one official. 

The Chinese officials indicated that the Soviet Union constitutes the 
compelling issue in United States-People's Republic of China pursuit 
of normalization. Soviet activity in Africa, the Middle East, the 
subcontinent and in Southeast Asia was mentioned as posing a 
common threat to both Chinese and United States interests. 

The Chinese indicated that conversations with Dr. Brzezinski and 
Secretary Vance had discussed this view. 

The then-pending Treaty of Peace and Friendship between China 
and Japan was noted as a key part of the anti-Soviet effort. Normaliza- 
tion with the United States was jointly mentioned as an important 
step in this regard. 

It was noted that Foreign Minister Huang Hua had intended to 
discuss these issues with President Carter at the United Nations 
earlier this year. The officials indicated that they had planned to stress 
that they see normalization primarily as a political issue, rather than 
a question of diplomacy. The normalization question must be handled 
"in light of the overall international situation and in a strategic 
perspective," the Chinese indicated. 

The comment was made that despite the areas of agreement ex- 
plored in the Yanee-Brzezinski visits, and the mutual desire for 
progress toward normalization, "there was no substantial result of 
these visits." 

NORMALIZATION 

Representative Wolff asked, "I wonder if you could tell us how you 
distinguish between the 'political' and 'diplomatic'; does it mean 
that we can proceed immediately to political normalization, and allow 
diplomatic normalization to proceed at its own pace?" 

The Chinese replied that they wanted the United States 'Mo take 
actual action" on normalization, but did not specifically respond to 



25 

the difference between "politics" and "diplomacy," other than to say 
that "in diplomacy there is a lot of empty talk." They said that they 
saw "action" as the key to differentiating political from diplomatic 
activity, but did not indicate whether they saw political normalization 
as being separable from diplomatic normalization. 

Representative Wolff noted the apparent contradiction raised by 
the fact that both China and the United States have full diplomatic 
relations with the Soviet Union, but not with each other. Further, 
the paradox is deepened by the fact that both China and the United 
States share the Soviet Union as a common adversary. 

In reply, the idea was raised that the two actions "the Russians fear 
the most are normalization between China and the United States, 
and successful conclusion to the Chinese-Japanese Treaty of Peace and 
Friendship. They are doing their utmost to obstruct these two things." 
On Taiwan, the discussion repeated the consistent theme that "there 
is no room for flexibility" on the principle of Chinese sovereignty, but 
added the contention that the "specific modalities" of the Taiwan 
question can be matters for United States-Chinese consultation. "The 
only obstacle between us is the issue of Taiwan." 

Representative Wolff indicated that the discussion was following the 
line already agreed upon in the Shanghai communique regarding 
"internal affairs," and asked the officials if they had any comment on 
the realistic application of the so-called "Japanese Formula" to any 
projected U.S. relationship with Taiwan after normalization with 
Peking. He also indicated that many Americans feel the "Japanese 
Formula" does not really cover the reality of U.S. interests in Taiwan. 

In the discussion which followed, the Chinese officials indicated that 
they felt the "Japanese Formula" represented a major concession by 
them in terms of the sovereignty issue, but that it was a concession 
they were willing to make in light of the common interest in meeting 
the Soviet threat. "If you look at the question from the political and 
strategic point of view, it is in the great interest of us both in dealing 
with the Soviet Union if we can normalize relations," an official said. 

TAIWAN CONTACTS 

Representative de la Garza then asked if "there is any effort being 
made by your government, aside from the question of relations with 
the United States, any effort of a non-military nature to unify Taiwan 
with the mainland? Do you have any direct contacts with the people of 
Taiwan?" 

In the discussion which followed, Chinese officials indicated that 
"so far there are no official contacts," but that longstanding personal 
or private acquaintanceships exist. "In fact," said one official, "Chiang 
Ching-kuo was my classmate." 

Representative de la Garza followed with the question "Wouldn't 
it be easier if brothers on Taiwan and on the Mainland could get 
together themselves and not depend on the attitude of the United 
States?" 

Discussion of this question centered on two points: The historical 
fact was raised that twice in the past the Kuomintang and the Com- 
munist Party had cooperated, first under Dr. Sun Yat-sen against the 
northern warlords, and second against the Japanese in World War II. 
"Since there has already been cooperation with the Kuomintang 
twice, can you rule it out the third time?", replied one official. 

35-200—78 3 



26 

ROLE OF THE UNITED STATES 

The second major point raised during: the discussion of Mr. de la 
Garza's query centered on the role of the United States in the Taiwan 
question. "We have often said to Americans that in our efforts to 
reunify the Motherland, we will respect realities, and that we can be 
flexible in the means of settlement. In this context, I am sure that it 
will be possible to find a settlement satisfactory to all," commented 
an official. 

Representative Fountain discussed the nature of the U.S. system of 
checks and balances between the executive and the legislative branches, 
adding that both branches represent the American people. "I hope you 
understand that while we are moving toward normalization, we would 
like to move at the same time in other areas such as the exchange of 
visits. You said that the one thing 'the Polar Bear' feared most was 
normalization. What would be the impact on Russia of normalization 
between the United States and the People's Republic of China, and 
signing of a treaty of mutual friendship and solidarity between us?" 

In the discussion which followed, it was indicated that the Chinese 
feel that normalizaton would cause the Soviet Union to move more 
cautiously in world affairs. The official added the thought that "if 
relations between our two countries are normalized the Soviet Union 
must be more cautious strategically." 

'The formalities of normalization are not important, whether to 
have a treaty or not. The realities of normalization will speak loudly." 
However, the officials indicated, China had no desire to be "played" 
as an anti-Soviet pawn. The Soviet interest was seen as separating 
China from the United States so as to allow Russia to deal separately 
with Europe, Japan, and the United States. 

SOVIET BLUFF 

In this regard, the officials indicated that the possibility of Sino- 
Soviet reconciliation was simply a "bluff" on the part of the Soviets, 
and that the United States should be on guard in the wake of 
heightened Soviet activity in Afghanistan and Vietnam. In particular, 
it was indicated, the Soviet's suggested "collective security" plan for 
Asia is a tipoff to their intentions. The Chinese indicated their feeling 
that the nations of South East Asia, particularly the ASEAN economic 
grouping, were wary of this Soviet activity, and that they shared the 
Chinese perception of Vietnam as a stalking horse for the Soviet 
Union. 

In enlarging on this theme, discussion indicated that the Chinese 
perceive the Soviet activity, particularly in Asia, as pant of an "en- 
circlement" campaign aimed at them. However, the officials indicated 
confidence that any such encirclement could be broken. A warning to 
the United States was added, particularly regarding what the officials 
saw ae Increased Soviet military activity within Vietnam. 

VIETNAM 

Representative Wolff noted that Vietnam represented a potential 
threat to the region, as well as to China. 

In the discussion which followed, the Chinese indicated they view 
Vietnam, "the Cuba of the KaM," as a potential threat to more than 



27 

just Southeast Asia., because of the Soviets' worldwide activity and 
plans and Vietnam's strategic position. Regarding the current crisis 
in Chinese-Vietnamese relations, it was indicated that the Chinese 
officials felt their country had shown great restraint prior to the 
eventual breakdown. "Only after' Vietnam took 10 steps, when it 
was taking the 11th step, then China began to take its first step." 

Taiwan's future 

Mr. Burke brought the discussion back to the question of Taiwan: 
"] accept the fact that both countries are interested in normalization 

of relations. T would like to ask three questions: First, if the Taiwan 
question remains unresolved, how long will it be before you take action 
to reunify Taiwan with China? Second', if we withdraw our troops, 
what is the future for the anti-PRC people who live on Taiwan? 
Third, if we withdraw our commitments, wouldn't the anti-PRC 
people negotiate with the Soviet Union, and thus create an even 
greater problem for all of us than if we negotiate normalization of 
relations, and work out our differences later?" 

In the discussion which followed, the commitment of the PRC to 
the "three conditions" was restated, as was the history of two past 
instances of cooperation between the Communist Party and Ivuomin- 
tahg. Also restated was the recognition by the PRC of the "realities" 
of the Taiwan question. "We believe that we Chinese can find a way 
to realize reunification of the island. In seeking ways to solve the 
question we will face realities." 

Discussion of the issue of Chinese renunciation of the use of force 
repeated the impossibility of sueh a commitment, from the Peking- 
standpoint, because of the sovereicm^ issue. The added thought 
was raised that, paradoxically, such a commitment mi^'ht actually 
make a peaceful settlement more difficult. On China's part, it was 
said, "we cannot undertake any commitment as to how to achieve 
the liberation of Taiwan, but we will do our best to create conditions 
to solve this question by peaceful means." 

JET FIGHTER SALE 

In this regard, officials indicated pleasure at what they interpreted 
to be a U.S. decision not to sell sophisticated jet-fighters to Taiwan. 
The thought was raised that such a sale could inhibit development of 
peaceful conditions which might lead to a settlement. 1 "If such action 
(sales) is taken, it will obstruct reunification negotiations and settle- 
ment bj peaceful means. If peaceful means are impossible, then 
armed force will have to be used." 

On the possibility of Soviet intervention on Taiwan, the consensus 
was that normalization under the "Japanese Formula," whereby 
nongovernmental relations between Taiwan and the United States 
are maintained, would preclude Soviet entry into the equation even 
assuming the KMT reversed its historical anti-Communist policies. 
The thought was added that Chinese leaders doubted the United 
States would oppose the use of force by the PRC in the event of 
what was termed "a Soviet presence on Taiwan." 

: It should be noted that no statement was made concerning thiptl-part.v sales r.> the 

ROC. nor did the discussion cover any weapons Other than the jets. On Oet; 24. it \v ; is 
i iinonneed that President Carter had rejected an ROC request for advanced fighter planes. 
The ROC had previously indicated unwillingness to accept Israeli Kfir jets as a substitute 
for the P— 5— G, and had been pressing tor sales of F-4's. and other sophisticated jets to re- 
place the present force in the 1980's. (Associated Press item in Baltimore Sun, Oct. 25, 
1978.) 



28 

Mr. Guyer concluded the conversation with the thought that; "We 
have been very impressed with the vitality of the Chinese people 
and their spirit of unity. It will be a tragedy if we do not find a way 
to bridge the gap between us and to cement our relations because I 
think we both have a great future." 

TRANSCRIPTS OF CONVERSATIONS 

The following three conversations between the delegation and offi- 
cials of the People's Republic of China were "on the record." Tape 
recordings, still and motion picture film, and extensive notes by 
CODEL staff members Palmer and Nelson were taken throughout 
the meetings. The following transcripts, while unofficial, represent 
as accurately as possible the complete conversations held by the 
delegation in Peking. 

Meeting With Hao Teh-ching, President of the Chinese 
People's Institute of Foreign Affairs, July 7, 4 p.m., 
at the People's Institute 

Ambassador Hao. We met before in the United States. Do you 
remember the question you asked me at that time? 

Representative Wolff. If you remember, then you have a very good 
memory! Thank you for inviting us to China. There have been many 
changes since my last visit. My question to you during your visit to the 
United States was related to this. The purpose of our visit is to find 
ways and means not to negotiate (we are not negotiators), but to make 
progress in normalization based on our committee's shared responsibil- 
ity with the Executive for matters dealing with normalization. 

Ambassador Hao. We can exchange opinions. You are the represent- 
atives of the people and therefore, like me, a commoner. Chinese 
Communists are all interested in politics and discussion of policies. 
Let us discuss questions of mutual interest. I have a question for you. 
Is the arrogance of the "Polar Bear" in carrying out expansion be- 
coming more restrained or more rampant? Why is he so aggressive, 
carrying out expansion from the Red Sea to the Horn of Africa, from 
North Africa to South Africa, from Europe to Asia — everywhere 
becoming more rampant? What do you think? 

WORLD DOMINATION 

Representative Wolff. This has been a continued plan of the 
Russians for a long time — to seek world domination, China and the 
United States as well. I think however, it is a misconception spread by 
i he pre-- to say t lint the United States is not remaining strong in its de- 
tei -ruination to stop Soviet expansion. Sometimes there are press stories 
related to individual weapons systems that some Members of Congress 
have opposed, but OUT det cnumat.ion to continue to remain strong 
against our adversaries is evidenced by the fact that we have here 
members of both the "liberal" and "conservative" elements of Con- 
. As a result of our difficulties with Vietnam, the United States 
bakes the position of not wanting to interfere in the internal affairs of 
other nations, just, like the position China has taken for a long tune. 
We arc well aware that the Soviets are now moving into new areas. 



29 

They have been in the Middle East for a long time. Now they are in 
Afghanistan and South Yemen openly. They are also in Angola, where 
they use the Cubans as surrogates. 

Ambassador Hao. Also Ethiopia. 

Representative Wolff. And Vietnam. 

Ambassador Hao. You are right. 

Representative Wolff. So they are moving all over the world and 
we now face a common adversary. I would like to ask the other 
members to comment. 

Representative de la Garza. I have my own opinion why the 
Russians are in so many places, but I wonder if the President would 
give his opinion to see if they match. 

Ambassador Hao. About the Russians? 

Representative de la Garza. Yes. 

Ambassador Hao. The "Polar Bear" has a wild ambition to expand 
outward and dominate the world. This was decided a long time ago and 
will not change. We have known this for a long time. He has a big 
appetite but lacks strength so he invariably displays one characteristic : 
He bullies the weak but fears the tough. If you wage struggle with him 
he is restrained but if you connive with him, his arrogance soars. Now 
he uses Western Europe as a focus and carries on unbridled expansion 
throughout the world. Recently, after succeeding in Ethiopia, the 
Soviet Union has continued its interference in the Arab Peninsula. 
Where next? Perhaps the Persian Gulf, the Red Sea area and southern 
Africa are the most dangerous. It has also stepped up expansion in 
Asia. This was manifested recently in Vietnam. Vietnam wants to be a 
small superpower. 

First it wants to dominate Indochina, then all of Southeast Asia. A 
small superpower needs to find its supporter. The superpower and the 
small superpower share the same design, so they work together to 
seize Southeast Asia. In this way they can block the sealanes in the 
Western Pacific and encircle China from south to north. 

Representative Wolff. Including the Indian Ocean. 

CHINESE IN VIETNAM 

Ambassador Hao. Of course. Just now I mentioned the essence of 
the matter. Its manifestation is in the persecution and ostracism of the 
Chinese residents (of Vietnam). In this way, Vietnam wishes to curry 
favor with the superpower. So recently, some friends have said that 
Vietnam is the Cuba of Asia. Now there are so many Cubas. One is 
in Latin America, one in Asia. Now I am afraid there may be one in 
the Arab Peninsula — South Yemen. So I say the present international 
situation is very tense. Some people talk of detente. I don't see even 
its shadow. I say get rid of "Detente!" 

Representative Wolff. We no longer use the word. 

Ambassador Hao. Just now you said some of the press underrate 
your strength. We say the United States has powerful economic and 
military strength. In the present world there are only two countries 
capable of fighting a world war. How can China fight a world war? 
Only you and Russia can. So we don't underrate your strength. Please 
do not have any misconception on that. But with your powerful 
strength you can only play your proper role when guided by a correct 
policy and correct principles. Otherwise, your strength cannot play its 



30 

proper role. I mean that in deciding on a polity toward the Polar Bear 
you should not be afraid. If you are not afraid you will not adopt 
policies which show fear of it. If you are afraid, unrealistic delusions 
may crop up in your mind. I mean when you adopt an approach in 
which you first of all try not to irritate the Polar Bear. Second, the 
Polar Bear is fond of chocolates. You supply it with advanced tech- 
nology and trade to pacify it. Also you try to get concessions from it 
by making big concessions. In the final analysis, fear will make you 
adopt an appeasement policy which will lead to serious consequences, 
and your powerful strength will play no role. That is my opinion. 

Representative Wolff. We are not dealing on the basis of fear. 
Make no mistake about that. It may sometimes appear that way 
because we use methods which try to avoid war, but it is not based 
on fear. 

CARTER SPEECH 

Representative de la Garza. Our ideas basically coincide. I agree 
with the chairman. I am sure you are aware of President Carter's 
recent speech in* Annapolis. 

Representative Fountain. I'd like to echo Congressman Wolff's 
remarks. I think your comments reflect some of your concerns about 
what we have said and what our President has done. About 2 years 
ago I sat in the Shah of Iran's office for about 1% hours. He expressed 
concerns similar to yours. He said that United States is the last 
bastion of freedom left on the Earth, the only one strong enough to 
defend the free world by taking strong positions against the Polar 
Bear, not necessarily by fighting. I argee with him. I come from a 
section of the United States which produced our President. He is a 
soft spoken southern gentleman who is attempting to handle both 
domestic and international problems. Some of his statements and 
some of the positions taken in SALT negotiations may have left the 
impression that we in the United States are not concerned about 
the Polar Bear. But the majority of Americans and a majority 
in the Congress understand Soviet expansionism. I assure you that 
we are determined to keep ourselves militarily strong enough to pre- 
vent the Polar Bear from taking over the world, even if we some- 
times speak softly. Notwithstanding these appearances, there is a 
recognition that Rus>ia and the United States have enough nuclear 
power to destroy each other, and we have a desire to prevent the 
outbreak of war. When the President said to the Russians that it is 
either cooperation or confrontation, he spoke for the American people, 
and he meant what lie said. 

Ambassador Hao. With respect to the concern about U.S. attitudes 
toward the Soviet Union, the Shah's concern is not accidental or 
unique. Many Western European countries share that concern. 
You know tins better than T. One should judge whether or not a 
policy is correct, not l>y words hut by actions. 



Representative Wolff. We know the "Polar Bear's" embrace can 
sometimes love you to death. 

Representative Ranosl. If in the course of American efforts to top 



31 

Russian expansion, this leads to military confrontation, to what 
extent could we count on the help of our friends in the PKC? 

Ambassador Hao. I think that surely you would not be isolated. 
The Polar Bear is not only the most dangerous enemy of the United 
States but is also the most dangerous enemy of China, Western 
Europe, Japan, and the entire Third World. This is not the time for 
the United States to anticipate how to act in the time of war. We 
should take effective measures so the Polar Bear will be afraid to 
launch a world war and will not launch it. We must postpone such a 
war. There are three methods: 

First, make concrete preparations against war. One should not have 
unrealistic illusions. 

Second, wherever the Polar Bear is engaged in strategic deploy- 
ments you must find every means to upset it. 

Third, don't adopt an appeasement policy in the face of your people 
or of the people of the world. 

Then the people of your country and the whole world will be men- 
tally prepared. Only by adopting these three methods can we insure 
that the Polar Bear won't treat you lightly and launch a world war. 
If it launches one, the people of the world will defeat it quickly. 
If we do not adopt these three methods the danger of war will ap- 
proach. We Chinese adopt these three methods. Of course, you know 
we are a developing country; that is, we are a poor country. But 
although we are poor, we are not afraid because we adopt these three 
methods. 

U.S. BASES 

Representative Wolff. I served at the United Nations and you 
have been an ambassador. During the course of your U.N. session, 
China has many times joined the Third World countries, often led by 
Cuba, in opposing U.S. bases in many parts of the world. This goes 
against our joint interest. You said that we should use actions to oppose 
the Soviet Union. I want to give you an example. There are questions 
on, for example, Diego Garcia and our bases on Guam, as well as our 
troop deployments in Asia. If China supports our efforts in maintain- 
ing strong positions throughout the world, then these (your delega- 
tion's) U.N. actions are opposed to your position. As an example, 
there is the Guam "Resolution." Even though the people of Guam 
want the United States to remain, the resolution says that the United 
States should withdraw its troops, and this resolution was proposed 
by Cuba. In view of Soviet efforts to move into various areas of the 
world such as the Indian Ocean, the Pacific and Korea, has there been 
any change in Chinese policy, or is there a possibility of working 
together on these matters? 

Ambassador Hao. I would cite your relations with Japan as an 
example. You have a security treaty and you have military bases. 
Since the Japanese are willing to let you stay and since you wish to 
stay, we do not wish to comment. Another example: You have 300.000 
troops in Western Europe, and you have military bases there. You 
have organized NATO. Since you are willing and they are willing, we 
don't want to comment. Concerning your troops in South Korea, 
the people of North Korea do not agree to their presence there. In 



32 

South Korea, only President Park Chung Hee agrees, not the people. 
So we support North Korea. The United States should withdraw 
all its troops and equipment from Korea and let the people of Korea 
decide. 

CAMBODIA 

Representative Wolff. What is the present situation in 
Cambodia? 

Ambassador Hao. We believe that the 6 million people of Cam- 
bodia will not submit to the 50 million Vietnamese. 

Representative Wolff. Do you think they can stand up to Vietnam 
without outside help? 

Ambassador Hao. The Cambodians can stand up. They are not 
isolated because they have the support of the people of the world. 
It is an unjust cause for Vietnam to invade Cambodia while it is a 
just cause for Cambodia to fight against invasion, and thus they 
will gain the sympathy of the world. In the end they will succeed. 

Representative Wolff. We are attempting to help the refugees 
from Cambodia and Vietnam. We are trying to get Asian countries 
to take them and we are also accepting quite a few ourselves. Can we 
cooperate on this question? 

Ambassador Hao. We have not considered this. 

Representative Wolff. Is there something we can consider? 

Ambassador Hao. We don't want to now. 

Representative Wolff. When Congressman Burke and I were here 
2 years ago and spoke to Chang Chun-Chiao, we talked about the 
possibility of the sale of military equipment to your government. He 
replied there was no interest on his government's side. What is your 
position now? 

Ambassador Hao. Is it the policy of your government to sell this 
type of equipment to us? 

Representative Wolff. I am just asking if there might be the possi- 
bility that your country has an interest? 

Ambassador Hao. Some years ago we wanted to buy computers 
with a capability of 10 million bits. The businessmen wanted to sell it, 
but your government would not approve the sale. You say that you 
want to sell military equipment to us, but aren't you afraid of ir- 
ritating the "Polar Bear?" 

MILITARY equipment 

Representative Wolff. Perhaps there has been a misinterpretation. 
1 asked whether China was interested now in military equipment. As 
to the question of computers, I believe that as our relations change 
there will bo a greater possibility of making such sales. 

Representative Fountain. We won't sell it to the Russians. 

Ambassador Hao. Now if you want to sell this type of computer, 
we won't buy it because we can make them. We don't have 100-million- 
l>it computers hut we don't need the first type. It seems that it bene- 
fited us that you didn't sell it because we can now produce it oui>elves. 

Representative Wolff. Then we, by inaction, provided cooperation, 
hut we have advanced beyond that. 



33 

Ambassador Hao. Thank you. 

Representative De La Garza. I would like to say something. We 
spoke of the Polar Bear, of how they come into countries for aggres- 
sive purposes, sometimes through the Cubans. But 10-12 years ago, 
I visited Africa and I saw China helping Africa, not promoting aggres- 
sion. An example was in Tanzania where you were helping build a 
railroad. I would like to remind you of this and commend you because 
of what I saw. 

Ambassador Hao. Thank you for your commendation. 

Representative Rangel. When I was a young man I had the op- 
portunity to find myself in the northern part of North Korea. Thanks 
for making it possible for me to make a speedy return to the United 
States. [Laughter.] 

Ambassador Hao. Did you reach the Yalu River? 

Representative Rangel. Yes; but only for a very short time. 
[Laughter.] 

Representative Wolff. You say the people of South Korea don't 
want us. That is not true. That is not what they tell us. The North 
Korean people may not want us, but North Korea was brought into 
the war by the Russians. 

Ambassador Hao. You say the South Koreans want you to be there. 
Your information comes from Park Chung Hee. Our information 
comes from the people. Our sources are different so our views are 
different. 

Representative Wolff. That doesn't cover Guam. And what about 
Vietnam? We were there; now the Russians use Vietnam to threaten 
the peace of Southeast Asia. 

Ambassador Hao. It is true that it threatens the peace of Southeast 
Asia. There are three elements there: Southeast Asia, the United 
States, and China. Is it frightening? It is not. 

Representative Wolff. It is bad but not frightening. 

Ambassador Hao. It is not so serious but we must deal with it. 

Representative Wolff. We have talked about our differences. 
Let's talk about how we can work together. How can we get together 
on such matters as trade, economics, and military affairs? 

Ambassador Hao. The Shanghai communique opened a new 
chapter in the relationship between our two countries. It has ex- 
panded contacts between our peoples. For example, you are now in 
China. Could you have come 6 years ago? You wouldn't have gotten 
visas. Now you want to come, we want you, and you are here. There 
are also trade relations between our two countries. Also cultural 
relations, scientific and technological contacts. The problem is that 
after 6 years, our relations are still not normalized. If normalization 
had been achieved, relations would develop even faster. Since there is 
no normalization, the development of our relations is necessarily 
affected. Didn't you ask last year whether we could just develop 
trade and put aside normalization? Do you remember? 

Representative Wolff. Wiry did I ask the question? 

Ambassador Hao. I don't know. 

Representative Wolff. Because I understand that you were the 
hardest liner on Taiwan. [Laughter.] 



34 

ACTIONS IX VIETNAM 

Representative Winn. You have suggested that the United States 
should try to upset the Polar Bear around the world. Are you your- 
selves trying to upset the Polar Bear by your actions in Vietnam 
in the last few days? 

Ambassador Hao. Of course. Wherever it takes action we exert our 
efforts to upset it. Since you are in Peking, you can see from broad- 
casts and newspapers that the struggle is intense. Who do we fight? 
On the surface we are struggling against the small hegemonist power, 
Vietnam, but in reality we are struggling against the big hegemonist 
power. 

Representative Winn. Would you like the United States to help you 
upset the Polar Bear around the world even without normalization? 

Ambassador Hao. We don't need that. Each of us can act according 
to our own way. We do ours and you do yours. There is a Chinese 
saying that different paths lead to the same goal. By taking different 
roads our actions in essence are coordinated. Take the second Zaire 
invasion as an example. In the first invasion the United States did 
nothing. In the second one you did something; we did more and the 
invasion was defeated. 

Representative Wolff. The relations between our two countries 
should not be based solely on the existence of a common adversary, 
but also on a common mutual interest in world peace. 

Ambassador Hao. We share your aspiration. If relations are normal- 
ized there will be more opportunities for this. 

Representative Wolff. Thank you for giving us the opportunity to 
visit China and to meet you. Do the other members have any more 
questions? 

SOVIET BUILDUP 

Representative Burke. Last time I was here your leaders said that 
there was a similarity between the Soviet buildup and what Hitler did. 
Like Hitler, the Soviets would eventually have to commit troops to 
Eastern Europe and then to attack all of Europe. One of your am- 
bassadors overseas also recently said the same thing. Do you have 
similar views? Will the use of troops in Europe occur, and if so, when? 

Ambassador Hao. At present the Soviet strategic focus is in Western 
Europe, because Western Europe is an area with powerful military 
strength; it is also an area with a high level of science and technology 
and occupies an important strategic position in the world. So in order 
to dominate the whole world they must first seize Western Europe. 
The Soviet Union has concentrated its troops in Eastern Europe and 
m the European part of Russia and has trained them in Western 
Europe. Although three-quarters of its troops are in Europe, the time 
is not ripe for world war. It uses its troops for bullying and sows 
dissension in order to force U.S. troops out of Europe. In this way it 
ran win without a fight. At the same time it. also carries out strategic 
deployments in North Africa, the Middle East, and Africa in order 
to encircle Western Europe from the flanks. Imagine when it seizes 
strategic materials from Africa and the Middle East, especially oil, 

and cuts off sealanes, it will then be easy to seize Western Europe. 
That is its strategic design. Some people say it is aimed at the East. 



35 

We say no. It pretends to be about to fight in the East, it feints to 
the East but attacks in the West. It wants to divert attention. Jt is nol 
possible to succeed in the East. Also the East does not cany t In- 
st rategic significance of the West. Will it launch a war against Western 
Europe soon? The factors for war are growing, but war is not likely to 
break out in the next 'A to 5 years, it is difficult to say after that. 
It will depend on the efforts of all of us. It is possible to postpone 
it for 20-25 years. We Chinese are peaceloving. We don't want to 
fight wars. But it is not up to us. We are not Moscow's Chief of 
General Staff. We must beware of this danger. 

Representative Fountain. In view of this situation what do you 
think the United States ought to do? 

Ambassador Had. You ought to apply the three methods which I 
mentioned earlier: To make preparations against war; to attempt to 
upset Soviet strategic deployments; and to bury your appeasement 
policy. 

UNSETTLED QUESTIONS 

Representative Wolff. I have one final point: There are a number 
of unsettled questions on the China boundary. Some islands are in 
dispute; the question of Hong Kong is not pursued very actively 
because the situation is satisfactory to your country. We haven't 
spoken of Taiwan today. Isn't there a similarity here? Is this not 
another boundary question? 

Ambassador Hao. You switched the subject. Do you have any 
ideas on Taiwan? 

Representative Wolff. I would like to find a way to talk about 
boundary questions. I think that perhaps Taiwan can be placed in 
a boundary context, rather than the way it has been treated before. 

Ambassador Hao. I don't want to discuss it as a boundary question. 
Taiwan is Chinese territory. Even though we explore this question 
today in a friendly atmosphere I'm afraid we might get emotionally 
excited, but since we are old friends I would like to say that you owe 
us a debt. I don't mean those of a century ago. W T e don't want to settle 
those. We are looking toward the future. But now we are in the 1970's 
and you are still interfering in the internal affairs of China. You 
don't respect our sovereignty. Don't you owe us a debt? We don't 
want to settle old debts, but on Taiwan it is more beneficial to the 
United States to settle it sooner, rather than later; faster, rather than 
slower. We think that the five principles of coexistence should guide 
international relations. This was recognized by both sides in the 
Shanghai communique. By this principle, who owes whom debts? 
Of course you owe us. Take the first principle. It says that one should 
respect sovereignty and territorial integrity. You enjoy territorial 
integrity; we do not. The second principle is mutual nonaggression. 
Does China have troops in the United States? No, but you have them 
in our country. The third principle is noninterference in the internal 
affairs of others. Taiwan is ours and you are interfering in our internal 
affairs. Some people even try to create "Two Chinas." So we are not 
going to settle old accounts but you are incurring new debts. The more 
you incur them the worse it is. I said the same thing at the breakfast 
meeting in the House of Representatives and at lunch in the Senate. 

Representative Wolff. I recall. 



36 

Ambassador Hao. Our two peoples are friendly to one another. 
The Chinese people are friendly to the United States, and in my own 
experience the American people are friendly to China. In my opinion 
the American people's view is that normalization can be realized 
very quickly. In the international world, the earlier the normalization 
of our relations, the better. This will be more beneficial to you than to 
us. I want to stop here. I don't want to settle accounts between us 
since 1848. 

VISITS AND DISCUSSIONS 

Representative Fountain. I have one observation. I am not 
familiar with the computer problem you mentioned. Maybe we made 
a mistake. It is like when we turned down Nasser on the Aswan Dam. 
Now Egypt knows the true nature of the Soviet Union and so do other 
countries in that area. I think that on normalization, we can further 
this by promoting other types of relations. The process can be con- 
tinued through more visits and discussions such as this. I know the 
Chinese are a proud people and do not want to ask, but if there is 
something that China needs, you should ask us. Maybe not that 
computer, but something else. I agree — I think the American people 
are friendly to China. 

Representative Guyer. I would like to invite you and your col- 
leagues to visit the United States. 

Ambassador Hao. Thank you. I will go there when there is an op- 
portunity. 

Representative Guyer. Perhaps we should convey that to our 
Government and work out an invitation. 

Ambassador Hao. Not the Government. I am just a common citizen. 

Representative Guyer. Our subcommittee might work out an 
invitation. 

Representative Wolff. Thank you, Mr. Ambassador. 

Meeting with Wang Jux-shexg, Vice Minister for Foreign 
Trade, Ministry of Foreign Trade, July 7, 1978, 9 a.m. 

After exchanging opening pleasantries, Congressman TVoliT began 
the conversation by noting that both countries had a common objec- 
tive to work together to promote closer cooperation between our two 
countries. 

Minister Wang. I am delighted to meet all of you and to have 
this opportunity to discuss matters of mutual interest. I believe 
this is your second visit to China? 

Representative Wolff. Yes, for me and for Congressman Burke. 

Minister Wang. Since it is your second visit you now have a better 
understanding of conditions in China, 

presentative Wolff; Yes, you can say I am an old friend of 
( !hina. 

Minister Wang. Friends who visit us several times we consider 
old friends, hut even those who come here for the first time are 
friends because they have made a contribution to mutual 
understanding. 



37 

TRADE QUESTIONS 

Representative Wolff. I believe it is important to strengthen our 
relationships so that we can move toward normalization, especially in 
the trade areas. That is why we requested a meeting with you today, 
to discuss problems which exist between our two countries and to 
see how we can help to solve them. In some areas there are still 
difficulties that stand in the way of increased trade. One of tin 
the question of frozen assets. I would like to ask what progress can 
be made in solving this question? I believe that until this question is 
cleared up it will be difficult for both countries to conclude such 
agreements as aviation agreements, banking arrangements, and other 
matters. 

Minister Wang. The question of frozen assets is not an important 
problem. Both our governments have already exchanged views on 
this question in the past few years. We do not think it will be difficult 
to solve. In previous years, trade between our two countries has 
reached a fairly high level, then in some years it has dropped. This 
year it will be up again. Lack of normalization affects the level of 
trade and the export controls imposed by your country also affect 
the development of trade. Sometimes our groups sign contracts but 
your government authorities do not approve the export licenses. 

Representative Rangel. What areas in particular do you have in 
mind? 

Minister Wang. I think you are very clear about this. One example 
is in the field of electronics. 

Representative Wolff. Electronics and computers. 

Minister Wang. Also when we want to import a company plant, 
sometimes there is one component in this plant whose export is not 
allowed. This then affects the whole sale. 

Representative Rangel. Specifically what type of components 
have you found this to be a problem with? 

TRADE CONTRACTS 

Minister Wang. It occurs not only in electronics but also in 
other areas. This is a manmade obstacle to trade. 

Representative Rangel. In America, business and government 
operate on two different levels. We Members of Congress would like 
to find ways of removing these obstacles. It would be helpful if you 
could tell us what types of difficulties you have so that we could try 
to make it easier to develop trade between our two countries. 

Minister Wang. We hope that the U.S. Government will provide 
facilities for trade with China in the spirit of the Shanghai com- 
munique. Whenever we sign contracts to import goods frorn America, 
American authorities should approve these exports. You should export 
what commodities you can. 

Representative Wolff. One obstacle in the past has been export 
licenses for highly sophisticated electronic equipment and components. 
With changing circumstances I think there is a greater opportunity to 
lift some of these restrictions so that we can be helpful to each other. 

Minister Wang. The U.S. Government has set obstacles not only 
on goods produced in the United States but also on some from other 
countries. 



38 

Representative Wolff. You mean licensing? 

Minister Wang. The American Government creates obstacles under 
the provisions of the so-called CoCom. CoCom is difficult for us to 

understand. 

Representative Wolff. This was originally an effort to see that 
sophisticated technology was restricted to our closest allies. We are 
now moving toward a policy of friendlier trade which will lead to 
lifting controls on a wide variety of items. This question should be 
discussed at the highest levels between officials who understand these 
problems. Discussion should be not only with businessmen but also 
high-level trade negotiators. Perhaps we ought to recommend that 
Robert Strauss come here, since there is now a high-level American 
science mission in Peking. There should also be a trade mission to dis- 
cuss these difficulties. 

REMOVAL OF OBSTACLES 

Minister Wang. In order to solve this problem one should take the 
Shanghai communique as a basis. As long as both sides follow the 
provisions of the Shanghai communique, trade can develop. We would 
like to see the removal of those obstacles which stand in the way of 
trade. Efforts of the business community have already helped to 
remove some of these. 

Representative Wolff. You mean the Deadalus case? 

Minister Wang. Yes; but the export was delayed, which caused us 
difficulties. Sometimes a business signs a contract but we are not sure 
whether your Government will approve. Some U.S. trade organiza- 
tions invite us to visit the United States for a technical exchange, but 
the U.S. Government then does not approve the export of that tech- 
nology to China. 

Representative Wolff. We should explain to you that these pro- 
visions are not directed against China. The American policy is to 
restrict certain types of equipment and prohibit export of these types 
to all countries. 

Representative Burke. For security reasons. 

state visits 

Representative Winn. Since we are talking about trade missions I 
would like to say that I hope that in the future, Chinese trade missions 
to the United States could include a visit to Kansas, my home State, 
because it is the center of food production. They should also go to 
Oklahoma and Texas, which are neighboring States, in order to look 
into oil production, I think both of these missions could accomplish 
quite a bit, and I would like to extend an invitation for a mission to 
visit Kansas. 

Representative Wolff. Concerning oil exploration, I wonder if the 
Government of the PRC is interested in joint ventures with American 
companies using high technology and American expertise as a method 
of getting around the export License problem? 

Minister WANG. I have often heard that the United States practices 
export controls because of security reasons but our import of American 
technology will not affect your security. If you think it will, you over- 
eat iniate OUT abilit v. 



39 

Representative Rangel. Tell them these are not directed 
China. 

Representative Wolff. I'd like to reiterate that these controls are 
not meant directly against China. They are part of a worldwide 
policy of our Government. We are now changing our relationships 
with the PRC as a result of our policy on moving toward normalization. 

OBSTACLES TO TRADE 

Minister Wang. We hope you will continue to make efforts and 
that the U.S. Government will act to remove these obstacles to trade. 
In our policy of striving to achieve the four modernizations, we rely 
mainly on our own efforts but for the most advanced technology, 
this comes mainly from imports. It is certain that a powerful China 
will be of benefit to the United States in a threat. This is in your 
strategic interest. As for oil exploration, a number of U.S. companies 
have come to China to exchange views on this and others will follow. 
This proves that we are interested in exchanging views on matters of 
mutual interest. 

Representative Fountain. Some export controls are prompted by 
complaints from other countries who are afraid of U.S. exports 
flooding their markets. We also occasionally have this fear; for instance, 
in the field of textile imports. This is where someone like Bob Strauss 
can help through negotiations by equalizing these problems. I would 
like to refer to a document I just received from the National Council 
on United States-China trade which presents a comprehensive picture 
of China's 10-year plan and of the prospects of the China market. It 
talks about the Chinese economy and your economic plans and is 
encouraging to those of us who wish to trade with China. Its conclu- 
sion is as follows, and I am paraphrasing: 

A HUGE MARKET 

China represents a huge market. It is following a pragmatic policy toward foreign 
trade questions. There is a great opportunity but U.S. companies are not trying 
hard enough. Most of our exports to the PRC are still agricultural. U.S. firms must 
be more aggressive in seeking to sell to China. Some, for instance, hear that thrv 
have competition from a Japanese company and simply give up. Normalization 
will help in the development of our trade with China but there are many things 
short of normalization which can be done and American firms will have to work 
harder in order to increase our trade. 

Would you care to comment on this document? 

Minister Wang. The Council has given you a true picture of China. 
Trade will develop in order to help develop our national economy. 
Since our relations with the United States are not yet normalized 
there are still some obstacles but this does not mean that we cannot 
develop trade. Recently we signed a long-term trade agreement 
with Japan. We also have a trade agreement with the Common 
Market. Both of these will be conducive to the development of our 
foreign trade. From our side we can import a number of commodities 
from the United States, mainly industrial. This does not, of course, 
exclude the possibility of some agricultural imports. 

Representative Wolff. Isn't this a change in your position? 



40 

Minister Wang. No, our policy is unchanged. We have consistently 
stood for the development of trade on the basis of equality and 
mutual benefit. As a result of the signing of the Shanghai communique 
in 1972 we have developed trade with the United States in the spirit 
of that communique. Of course, in recent years we have been pre- 
occupied with domestic developments and particularly during the 
Cultural Revolution we stressed the problems we have at home. 
The Cultural Revolution won some achievements but it was even- 
tually sabotaged by the Gang of Four. They also sabotaged our rela- 
tions with other countries and thus affected some implementation of 
our consistent policy. Since the smashing of the Gang of Four we are 
now able to apply more smoothly our consistent policy but that policy 
has not changed. We now just act on it better. We have now entered 
into a new epoch of construction and we have a greater need to develop 
international trade and to expand trade. We need to import commodi- 
ties in large quantities and at the same time we need to increase our 
exports. 

CHINA EXPORTS 

Representative Wolff. What types of exports can you send to the 
United States? 

Minister Wang. There are quite a number of things. For instance, 
items of daily use, consumer goods, light industrial products and some 
minerals and metals. Also, if we develop our oil production we could 
possibly supply some oil to you. 

Representative Wolff. That's very important. 

Representative de la Garza. You seem very concerned about 
advanced technology but as far as I know, the only controls we have 
are on three things: military items, computers with dual civilian- 
military use, and nuclear equipment. Other technology such as medical 
technology, agricultural machinery, and so forth, are not controlled; 
only those three items. 

Minister Wang. It is very difficult to distinguish between military 
and civilian use. For example, we can import grain and if the people 
eat it it is civilian. If the army eats it then it is military. 

Representative de la Garza. That is not the problem. There is no 
control over any but those three items. 

Representative Wolff. But there is sometimes some question over 
the ultimate use of equipment like trucks and aircraft. 

Representative Guyer. I think there are certain ideological goals 
that our two countries could share, not only trade. There are positions 
we could agree upon. As for trade, I wonder if we could have a list of 
some areas where you could invite companies to come to China to 
help out like you have with Pullman. My congressional district has a 
great deal of agribusiness. If we could have an invitation list to take 
home to our people this could speed up the process of the develop- 
ment of trade. 

Minister Wang, We share your desire to develop trade with the 
United States. We hope we can remove the obstacles in the way of 
trade. We also hope that visits between our two countries will be more 
frequent than they have been before. In the future we will speed this 
process up. 



41 

Representative Wolff. Do you feel it would be possible to have un 
exchange of landing rights for airlines in each country so as to help 
increase visits? 

Minister Wang. This will be difficult because of the lack of normal- 
ization. We do not preclude the possibility of individual pianos coming 
to our country or going to yours. For instance, you came here on an 
American plane but this could not be a regularly scheduled service. 

COOPERATION 

Representative Wolff. I want to thank you for receiving us. I 
think our visit here served a useful purpose. Our wish is to increase the 
possibilities of cooperation between our countries in all fields. Most 
of the members of this delegation are on the International Relations 
Committee and we include chairmen of individual subcommittees. 
Mr. Rangel is also on the Ways and Means Committee which deals 
with the question of "most favored nation." We proposed to do what 
we can to advance normalization. The question of political normaliza- 
tion must go through the committee as well as through the Executive. 
We share authority with the Executive and our objective is to seek 
means to advance the process of normalization. We think this will be in 
the best interest of both countries. 

Minister Wang. I am very happy to have been able to exchange 
views with our American friends. This will contribute to advancing 
mutual understanding. I think that the development of relations be- 
tween our two countries is in the interest of our two peoples. It is 
better for you to come to China to see things with your own eyes. 
Some views may not be acceptable to the other side but we do have 
some points in common. For instance, both sides desire to develop 
trade and both sides wish to remove obstacles to trade. We are willing 
to develop trade and if there are obstacles they must be removed. If 
they are not then we will go ahead and develop our trade with other 
countries because we will be forced to do so. We hope that you will 
use your influence to work toward improving our relations. 

INCREASED VISITS 

Representative Fouxtaix. We also hope that in the future repre- 
sentatives of China will come to the United States to talk to people 
engaged in trade and get a clearer picture of our side. I note that your 
leaders have recently been traveling more and I hope that some of 
them come to the United States. Your leaders could gain better 
understanding of those problems and help to resolve these obstacles. 
In fact, the United States does not have very many restrictions on 
foreign trade. 

Minister Waxg. Quite a few of us have gone to the United States 
already. Most have been specialists but they included some senior 
officials. We hope to increase this type of visit. 

Representative Wolff. I hope that as a result of this trip and know- 
ing more about some of these problems and your desires that we in 
Congress can eliminate some of the obstacles to trade between our two 
countries. 



35-200—78- 



42 

Meeting With Dr. Chou Pei-Yuan, Vice President, Academy 
of Sciences; President, Peking University (at Academy of 
Sciences) July 8, 1978—9:30 a.m. 

[Following introductions.! 

Representative Wolff. Congressman Winn from Kansas is not only 
a member of the International Relations Committee, but is one of 
the ranking members of the Committee on Science and Technology 
of the Congress. 

Before, when I first came to Congress, I was a member of the Science 
and Technology Committee. And Mr. Winn also serves on the Space 
Science and Application Subcommittee. 

Dr. Chou. We welcome Congressmen who are doing political 
work as well as Congressmen doing scientific work. To use our way of 
saying things, the science and technology in our country serve the 
needs of proletariat politics. By politics we mean we must build the 
socialism, we must criticize the Gang of Four and we must pursue the 
philosophy of Marxism, Leninism, and Mao Tse-tung's thought to 
guide our work, so science and technology cannot be separated from 
politics and philosophy. So if you have any questions in this respect, 
we will be glad to answer. 

scientific meetings 

Representative Winn. I would like to ask the professor what part, 
if any, he is playing in the meetings with our scientific advisers? 

Dr. Chou. Dr. Frank Press is an old friend of mine. The first time 
he visited China in 1973, he led a seismological delegation. I was 
working in Peking University. 1 received him there. In 1975, a dele- 
gation of the Scientific and Technical Association visited the United 
States. It was received by Prof. Frank Press and also the Academic 
Exchange Committee. You see Frank Press was the head of the Com- 
mittee on Scholarly Communications with the People's Republic of 
China. There were 14 others — we were staying with different scientists 
of the United States. I had the privilege of staying with Prof. Frank 
Press in Boston. 

Representative Winn. Have you seen Frank Press and his group 
since they've been here? 

Dr. Chou. Yes; I had the honor of greeting him at the airport when 
he arrived in Peking. I also attended the banquet given by Comrade 
Fung Li, Chairman of the Scientific and Technical Commission of 
China. 

Representative Wixx. Can you give us your opinion of how the 
scientific talks are going between the PRC and the United States at 
the present tune? 

Dr. Chou. I didn't join these discussions. I am doing scientific work 
at the moment and the delegation led by Professor Press is invited by 
the Scientific and Technical Commission. On the Chinese side, the 
discussion is presided by the Scientific and Technical Commission. Of 
course ^here are some leaders of the different scientific departments who 
also take part. From the academy, some other comrades are taking 
pari m the discussion, so I am not joining them. 

Representative \Vi\\. Can the Professor tell us, If he would, what 
scientific work he's involved in at the present time? 

Dr. ('nor. Recently, theoretical physics; in the past I was involved 



43 

in general relativity. Foe many years I've been involved in the study 
of fluid mechanics. I came to Peking University only very recently. 
J came to the Science Academy very recently. 

Representative Winn. Lester Wolff and 1 formerly served as mem- 
bers of the Science and Astronautics ( Ynnmit tee, the Space ( Jommittee. 
But 4 years ago we changed the name to the Science and Technology 
Committee. And at the present time, hall* of our jurisdiction deals with 
energy, that's where the technology comes in. Instead of the astro- 
nautics, we still have the space program. 

SCIENTIFIC DEVELOPMENT 

Dr. Chotj. I think I can give you a brief introduction about the 
development of China's science and technology of the future, in the 
near future. Just now, you talk about the space science, and we are 
also attaching great attention to this subject. This year, the 5th 
National People's Congress was held, and at that Congress the general 
task for the new period was decided. That is, we should realize the four 
modernizations by the end of the century. The four modernizations 
are: industry, agriculture, science and technology, and national defense. 
After the completion of the 5th National People's Congress, the 
National Science Conference was held, about 6,000 people took part 
in the conference. At the National Science Conference, we discussed 
the important thing, that is the plan for the years 1978-1985, for the 
development of science and technology in 8 years. We have set some 
goals in a plan. By 1985, we need to build a contingent of 800,000 
scientific and technological research workers. According to our knowl- 
edge (this knowledge may not be correct) there are 1 .2 million scientific 
and technological research workers in the United States. Since you're 
working on the Science and Technology Committee, you may tell 
us whether this is correct or not. 

Representative Wolff. It depends entirely upon how you interpret 
science and technology; whether you're talking about pure scientists or 
applied scientists. 

Dr. Chou. If you count these together? 

Representative Wolff. It is very difficult to say because so much 
of the research in applied science is being done by individual firms 
rather than by the Government itself. Therefore it is hard for us to 
make any assessment of the numbers, but I would say that your figures 
are perhaps very conservative in the amount. There are more today 
in applied technology for example. We have a great number of people 
working in that area which would expand that figure many times. 

NUMBER OF SCIENTISTS 

Dr. Chou. We have a pretty accurate figure of the numbers of 
Ph. D.'s who are trained in science, engineering, and medicine. It is 
a fairly good estimate. But still, there are many people working in 
industry who do not have a Ph. D. According to our information, the 
Soviet Union has 900,000 research workers. Even if we have trained 
820,000 research workers by 1985, we are still lagging far behind, com- 
pared with you, because you have only a population" of 200 million 
while we have a population of 800 million. 

Representative Winn. What about the facilities to train that many 
people? 



44 

Dr. Chou. Now we have better industrial bases than we had in the 
early days after our liberation. And our Government is going to make 
big investments with regards to facilities. We are going to supply the 
main universities with more equipment. 

Representative Wolff. When I visited here in 1975, I went to 
Peking University. At the time there was a question as to whether or 
not the political activity overshadowed the scientific. We have always 
had a great question in our own country of academic freedom; how 
does the situation stand today? I know that in your opening comment 
you did make the relationship between politics and science. Yet to 
operate most efficiently in the scientific field you have to have the 
freedom to develop your techniques and the application of those 
techniques. 

Dr. Chou. In which month did you go to the Peking University in 
1976? 

Representative Wolff. April. 

CURRENT PROGRAMS 

Dr. Chou. It was a dark period for the Peking University at that 
time. It was under the rule of the Gang of Four. Because at that time 
the Gang of Four was on the loose. It was attacking the party relent- 
lessly. The Gang of Four wanted to seize the stage and party in power. 
It used Peking University for the bridgehead. By a bridgehead, I mean 
they used the Peking University and also the Ching Y University. 
They set up a joint criticism group from both universities and used 
this group as a basis to propagate the public opinion they had prepared : 
Anti-party, anti-Mao Tse-tung, anti-Chairman Mao's revolutionary 
line public opinion. The criticism group of Ching Y and Peking 
University confused the minds of the people, which was very serious. 
With regard to the academic freedom mentioned by Mr. Wolff, I 
would like to comment on it later. In our plan for the development of 
science and technology we are also going to fulfill our task in the 27 
spheres and we are going to undertake more than 100 programs. The 27 
spheres include the basic science and also applied science. Among the 
over 100 programs, 8 programs are vital. They have a vital bearing on 
the development of our national economy. The 8 program^ are: (1) 
The research of agriculture; (2) material science; (3) energy; (4) 
computer science and technology; (5) space science and technology; 
(6) laser; (7) high energy of physics; and (8) genetic engineering. 

The science and technology of space is listed as one of the major 
programs in the near future. We can also divide these eight programs 
into different groups. 1 think agriculture, materials, and energies have 
vital values on the national economy. Another three programs are 
advanced technology. They are the elect rocomputers, laser, and space 
science and technology. The remaining two, that is the high energy 
physics and genetic engineering, are basic sciences. You can see that 
we have a comprehensive plan for the development of science and 
technology. After the plan is drawn, the scientific and technical or- 
ganizations, also the universities and schools of higher learning, the 
enterprises and also the local scientific and technical organizations 
undertake the task and they are t rving every method to fill fill oar plan. 



45 



RESEARCH INSTITUTES 



In our country we have research institutes which belong to the 
Science Academy. Then we have research institutes and research 
groups which belong to the university and institutes of higher learning. 
We have research institutes attached to the various ministries of 
•production, like agriculture, machinery and so forth. Then we have 
research institutes which belong to the provincial governments, like 
Peking, the city of Peking, the city of Shanghai, and also the provinces. 
You see all these are a network, so far as scientific research is con- 
cerned, it's under the leadership of the State Commission for Scien- 
tific Research. 

Representative Winn. It still is a very ambitious program. 

Dr. Chou. It is. This isn't the first time we drew up a plan. Actually, 
in 1956, we drew a 12-year plan for the years 1956-67, under the 
direct leadership of the late Chairman Mao. We fulfilled this plan 5 
years ahead of schedule, in 1962. That was the first plan for the 
development of science and technology in China's history, for a 
country which has 600 million people. 

With regard to academic freedom we are acting according to the 
principles made up by Chairman Mao. That is "let 100 flowers bloom 
and 100 schools of thought contend." After the plan is drawn, we 
don't mean we will carry it to the letter. When a situation changes and 
when there is a need to make alterations these will be allowed. Because 
we can't know everything at the moment. We_must enhance under- 
standing through practice. 

ENERGY POTENTIAL 

Representative Wixx. Would the professor care to touch a little 
bit on the direction China is going on the energy problem? 

Dr. Chou. Of course, I'm engaged in the basic science research. I'm 
not very familiar with this subject, but I will give you my opinions. 

Representative Wixx. According to the information we have re- 
ceived, China has reached petroleum, coal, water resources, and water 
power. 

Dr. Chou. Our American friends know a lot about our petroleum 
resources because much has been quoted about the reserves in China 
and we're not very clear about it. We have already set high goals for 
ourselves. We are going to build 10 major oilfields. 

I think we have rich petroleum fields and our friends know this. I 
think we have natural oil resources and the Japanese industrialists are 
very much interested in it because they import oil from the Arab 
Peninsula. 

Representative Wolff. So do we. 

Dr. Chou. So there is a wide prospect for trade in this respect. Of 
course we will make economical use of the oil resources, we will not 
waste the resources. 

Representative Wolff. One of the points I think is quite important 
in all of the exploitation of fossil fuel is that these are exhaustible 
supplies; they are not inexhaustible, and they can be used up. I noticed 
you did not mention any work in solar energy or nuclear and the like. 
Nuclear energy is exhaustible unless you use a breeder reactor which 
produces its own fuel. The importance, it seems to me, is that you 



46 

have the attributes of a desert (which is something nobody considers 
an attribute) and you get a lot of sun. Combining work with us in 
spare and the utilization of your desert to farm energy seems to me 
to be a field for the future that China could establish great leader- 
ship in. 

Dr. Chotj. Of course with these fossil oils and fuels, for instance 
the petro and the coal, we should make economic use of these resources. 
If you waste them, they would be exhausted very quickly. According 
to my knowledge, I think in China we've not yet developed the pri- 
vate ownership of automobiles. We are going to develop public 
transportation facilities. 

Just now you mentioned solar energy, there is also thermoenergy. 

Our country is also researching this subject. For instance, the 
Research Institute of Physics is undertaking this subject — plasma 
physics and thermonuclear control and fusion energy. 

WATER POWER RESOURCES 

We attach great importance to these subjects and we are going to 
explore the water power resources. We have been talking about build- 
ing a reservoir in the gorge of the Yangtze River. We have been 
making studies for over 20 years. I myself attended water conserva- 
tion conferences twice, in 1958 and 1959. If a dike is built on the gorge 
of the Yangtze, 30-40 million kilowatts of electricity can be produced. 
After the construction is completed there, amanmade "Mediterranean 
Sea" will be created in China. And the climate in that area will be 
changed. Also navigation and fishing are involved in this respect. So 
many aspects are involved, we have been undertaking this study for 
many years. 

Representative Wolff. One of my first exposures, some 14 years 
ago, in the Science and Technology Committee was experimental work 
in what we called "moving the weather" — of moving the climatology 
from one area to another. 

You did mention genetic engineering. I'm wondering why the em- 
phasis on genetic engineering? What is the ultimate purpose? 

GENETIC ENGINEERING 

Dr. Chou. Genetic engineering will play a very favorable role 
in the development of our agricultural production. It will improve 
the strains. About the energy problem, 1 would like to add one more 
word. Although China has rich energy resources, we still need to 
develop energy. We are still in great need of energy. In the country- 
side, we are still lacking many fuels. In the country we are now using 
Datura] gas for fuel which can produce electricity. 

Representative Wolff. We have of recent years been doing the 
same as you know. In fact, today we have almost a greater need for 
Datura] gas than we do have for oil. 

Dr. Chou* We have very much enjoyed our discussion, but since 

time is limited, may we stop here? 

Representative WOLFF. One final point. Do you foresee mutual 
cooperation in the scientific area where we can piofii from your activity 
in research and development and you can profit from ours? 



47 

Dr. Chou. Yes; the Chinese people very much support scientific 
exchanges. This is the very first item listed in the Shanghai communi- 
que, and we have made some progress in this in the past 2 years. 

We have some limits at the moment because there is no normaliza- 
tion of relations between our two countries. But if relations are normal- 
ized between our countries, then we can make bigger strides. I agree 
with you that exchanges are beneficial to both sides. The machinations 
of the Gang of Four unfortunately widened the gap between our two 
countries, so we welcome you now. 

Representative Wolff. Thank you, Dr. Chou. 



THE ITINERARY 

A complete listing of the delegation's itinerary is presented as the 
first item in the appendix. The purpose of this section will be to discuss 
briefly some of the highlights of the itinerary, and to note some of the 
themes currently motivating China which the itineraiy seemed to 
illustrate. 

Each of the cities visited — Shanghai, Peking, Sian, and Canton — 
provided the Delegation with a varied "mix" of Chinese industry, 
culture, and social activity in what might be termed "post-Gang of 
Four" China. If there was a predominant theme in virtually every 
stop we made, it was the difference between life under the "Gang of 
Four," and during the Cultural Revolution, and what things were 
like — and likely to be — under Premier Hua and Vice Premier Teng 
Hsiao-ping. 

Shanghai 

The first 3 days were spent in Shanghai, one of China's most 
Westernized cities, built originally as a trading port for the Europeans, 
and retaining a physical veneer of modernity, vintage 1935. As befits 
a major city, the people of Shanghai moved with the bustle of their 
compatriots in any society, on any continent. 

Four events in Shanghai stand out: The visit to the Shanghai gen- 
eral Petrochemical Complex, a tour of the Shanghai Dance Institute, 
the "July 1" commune, and a concert by the Shanghai Philharmonic 
Orchestra. 

While the petrochemical complex might at first glance seem the 
key to understanding China's modernization program, the cultural 
aspects of the dance institute and the concert also played an important 
part in the tapestry woven by our 10 days in the People's Republic. 
All three had this in common — their activities have been greatly 
affected by the shift in power. 

Petrochemical Complex Director Kung Chao-juan made clear 
China's interest in Western involvement in development, and in 
Japan's role in developing the complex to its present state. Equally, 
however, the director was proud of the work by ordinary Chinese in 
constructing the basic site. Prior to the fall of the "Gang of Four," 
only the theme of self-reliance would have been discussed — rather than 
the contributions of Japan, and the need for future foreign involve- 
ment. The delegation received the standard tour; briefing by the 
director and his colleagues, a walkthrough of a section of the plant 
and its production line, a visit to the kindergarten for worker's chil- 
dren, typical worker's housing where we talked with a "model family," 
and a stop at the complex hospital for a talk with doctors and staff — 
and, of course, an acupuncture demonstration. 

(49) 



50 

The importance of the tour was that the delegation could see first 
hand what China considers to be a prototype for its petrochemical 
development, and for industrial complexes in the years ahead. An 
immediate impression of the delegation was that standards of environ- 
mental protection for workers needed to be greatly increased. Raw, 
unfilterecl acrylic fibers floated free throughout the plant, and a steady 
ingestion of such particles will surely lead to severe health complica- 
tions in a few years. This was discussed frankly with the medical staff 
of the hospital, who said they were aware of the potential, and were 
testing workers on a regular basis. 

But the petrochemical complex, and for the same reasons, the 
''July 1" Commune, were basically what the delegation expected to 
see — and was expected to see by its hosts. In this respect, the itinerary 
differed only in location from that of most other congressional visits 
before, during, or after the 'Gang of Four." 

CULTURE 

The visits to the Dance Institute, to the Yu Gardens, and the 
Philharmonic were of a different order, however. At these three stops, 
arranged at the delegation's request, our hosts made clear to us that 
what we were seeing would have been impossible just 18 months 
earlier. The gardens had been closed to all but senior cadres. The 
Philharmonic could never had played the Western pieces (New World 
Symphony, among others) nor many of the Chinese works we heard. 
And the Dance Institute drama students performed a scene from the 
play, "The Dying Tree Comes to Life," banned by the leader of the 
"Gang of Four" Mao's widow, Chiang Ching. 

These cultural events, and the history of the recent years conveyed 
by individuals at each visit, brought home to us a sense of the 
pervasive and paralyzing influence of rigid adherence to strict ideology 
developed during the Cultural Revolution, taken to its logical 
extreme by the "Gang," and which is now being rapidly undone 
by Premier II ua and Vice Premier Teng. 

Our hosts seemed to be showing us that if the petrochemical com- 
plex, and the "July 1" Commune, are to play their role in modernizing 
and feeding China, then the intellectual flexibility and creativeness 
symbolized by the young dancers, writers, and actors must likewise 
be harnessed. It was particularly on such occasions as the visit to 
the institute that the theme of "Let 100 flowers bloom, let 100 schools 
of thought contend" was cited as the new rallying cry for China's 
renewed development plans. 

Peking 

In Peking, the importance of the delegation's talks with Vice 
Premier Teng and his associates obviously formed the major highlights 
of the mission to the People's Republic of China. But in Peking as 
well, the cultural messages members had been almost subconsciously 
absorbing continued. 

y* Again, the delegation was taken to an area closed under the "Gang 
of Four" and reserved only for senior cadres — Pei Ilai Park — now 
thronging with ordinary Chinese citizens. Similarly, a musical per- 
formance, this time a vocal conceit at the Nationalities Palace of 



51 

Culture, featured artists, and music, banned by Chiang Ching and 
her supporters. 

Some of the cultural activities remained constant with China of any 
period, of course. Xo amount of ideology could prevent the Chinese 
or foreign friend alike from being impressed by the Great Wall, nor 
moved by the great human effort the Wall represents. Similarly, the 
Forbidden City preaches the message that the conspicuous wealth 
of China's pre-20th century rulers stemmed from the strength of the 
people — a message which both Chiang Ching and Teng Hsiao-ping 
would agree upon. 

TUXXEL 

Two events in Peking stand out for their symbolic value, however. 
The first, more mundane, was the by now standard visit to an under- 
ground air raid shelter, perhaps "the" underground shelter, since 
no foreign visitor has ever been taken to any in Peking but the Ta 
Sha Lan Street shelter under the tailor shop. 1 There, Mr. Kao, Chair- 
man of the Air Defense Works of the area, explained how the series 
of cold, damp and still unequipped or stocked tunnels had been dug, 
starting in 1969, by volunteer labor by the residents of the street. 2 

Members expressed doubt that the tunnel complex, presumably 
a prototype for similar tunnels throughout Peking and other Chinese 
cities, could actually withstand nuclear attack, or a sustained seige, 
Mr. Kao made the interesting point that the tunnel systems have been 
specifically designed to safeguard local populations for 1 or 2 days 
in the initial stages of an emergency, then to facilitate their evaculation 
to the countryside. 

Whether or not the tunnel system could actually withstand an 
attack did not seem to be as important as the simple fact of the tunnel's 
existence within the context of the Chinese foreign policy line. At 
least on Ta Sha Lan Street, the message was loud and clear: "We are 
preparing, we are taking action to defend ourselves." 

Another example of the hard work of the Chinese people being 
melded with a message — this time a message as close to the spiritual 
one is likely to find in China — came on the delegation's Sunday 
morning visit to the tomb of Chairman Mao. 

Mao lies in state in a huge building itself dwarfed by Tienamin 
Square in Peking, site of the riots following Chou En-lai's death 
which led to Teng Hsiao-ping's purge by the "Gang of Four." Visitors 
and ordinary Chinese alike join separate but very long lines to enter 
the building, which greatly resembles the Kennedy Center in Washing- 
ton. Entering the large receiving chamber, the stream of visitors 
divides to pass through doors on either side of a massive statue of Mao 
seated in a pose familiar to Americans from the Lincoln Memorial in 
Washington. Chairman Mao's remains lie in a glass coffin in the center 
of the main chamber, a velvet rope separating the uniformed honor 
guard from the viewers passing steadily by. Mao is dressed in a light 
grey tunic, with the flag of his nation draped over his legs and lower 
torso. The atmosphere in the huge room is quiet, respectful, even 
reverential. It is a moving experience. 



- During Representative Wolff's 1076 mission, the delation made an onsitf Inspec- 
tion of an extensive tnnnel complex in Dairen. Manchuria, near the Sino-Soviet border. 

- By implication, the Chinese confirm suspicions that the tunnel program has not been 
n* vigorously pursued as the Ta Sha Lan tour miffht indicate. In the defense '"white paper" 
in the appendix, the author urges a renewed tunnel digging effort to create a modern 
'Underground Great Wall." 



52 

Viewing the physical proof of Mao's passing brought home to the 
delegation that- fact the while the late Chairman's picture remains 
ubiquitous, he now shares billing with Premier Hua whose face also 
gazes down from the wall of every school and meeting room. Further, 
the ! 'little red book" was no longer in evidence, except under glass in 
the hotel souvenir shops. 

While in Peking, an important stop was the delegation visit with 
Chou Pei-yuan, President of Peking University, and an afternoon 
visit to the University itself. The delegation also toured a rural techni- 
cal university in Sian, and discussion of the university visits will be 
combined at the close of this section. 

Sian 

Sian, the major city of Shensi Province, and site of the assembly 
plant for the British Spey jet engine, seemed a rural and dusty back 
country place after the cosmopolitan bustle of Shanghai and Peking. 
While the people still looked adequately housed, clothed, and fed, 
they and their area seemed very much closer to the earth than their 
more eastern cousins. They were also clearly more surprised to see 
foreign visitors, and at once more friendly and more shy than the 
people of cities more often on the foreigner's itinerary. 

The visit to the Big Goose Pagoda, and the now world famous 
archeological dig at the tomb of China's first emperor, the builder of 
the Great Wall, Ch'in Shih Huang Ti, had the same theme as similar 
sites throughout the People's Republic: it was through the hard work, 
skill, and wisdom of the people that such treasures were gathered, and 
such wonders constructed, they survive as monuments to the Chinese 
people. The site of the Emperor's tomb is presently filled-in while the 
Chinese construct a building (large enough to enclose several football 
fields) over the estimated 6,000 ceramic warriors still guarding what- 
ever remains of the body and treasure of the man who first unified 
China 2,200 years ago. 

A relatively more recent cultural monument, reaching back only 
several hundred years, also had a modern message for the delegation, 
and that was the hot baths of the Dowager Empress. The famous 
"Sian Incident," where the Kuomintang's internal rivalries produced 
the kidnapping at the baths of Chiang Kai-chek by one of his own 
generals, is faithfully retold by Communist hosts. Experts in the dele- 
gat ion noted some slight historical editing, but the fact remained that 
after Chiang was detained, the KMT and the Communist Party 
joined in a more vigorous prosecution of the war against the invading 
Japanese. 

Canton 

The delegation only spent an afternoon and evening in Canton, but 
was able to tour the old waterfront area, site of the preliberation 
European "concessions." As our hosts stressed, Canton's importance 
to the modernization of China is underlined by the trade fairs held 
during the year fairs which even the "Gang of Four" did not halt — 
at winch Chinese economic and industrial experts and officials mingle 
with representatives of Western and Japanese enterprises. 



53 

Peking University and Chiaotung University, Sian 

The visits to these two universities have been saved for last in this 
brief survey of the itinerary because the importance of education in 
China's quest for modernization deserves the extended treatment 
which foreign policy and other modernization factors receive in 
sections following this. 

PEKING UNIVERSITY 

Prior to visiting the campus of Peking University, the delegation met 
Avith university president Dr. Chou Pei-yuan, who greeted the mem- 
bers in his dual capacity as Vice Chairman of the Academy of Sciences. 

Dr. Chou stressed the difficult times recently ended with the fall of 
the "Gang of Four," and went into some detail on how the life of the 
scientific and academic community had been disrupted during the 
entire period of the Cultural Revolution. Under the new leadership 
of Premier Hua and Vice Premier Teng, however, Dr. Chou expressed 
confidence that modernization plans would go forward 

GOALS 

Crucial to China's goal will be development of 800,000 new "scien- 
tific workers" by 1985, Dr. Chou said. (The Soviet Union now has 
some 900,000 such workers, and the United States 1.2 million, he said.) 
The Maoist injunction of "Let 100 flowers bloom. Let 100 schools of 
thought contend" would be the guiding rhetorical principle of the 
increased and improved research programs now being instituted. How- 
ever, Dr. Chou said, primary emphasis will be on projects with imme- 
diate use to the agricultural and industrial community, rather than 
on more esoteric subjects. 

As an example of the scope of programs China is developing, Dr. 
Chou mentioned the Yangtze River irrigation project under consid- 
eration for 20 years. The Yangtze project is so vast that the man-made 
lake which would be created by it was compared to the Mediterranean 
Sea by Dr. Chou. He said its size would be sufficient to produce actual 
climatological changes, as well as changes in the physical environment 
and local wildlife and fish population. 

The visit to the Peking University campus was hosted by Professor 
Chang Lung-hsiang, a biochemist, several staff members, and a group 
of English language students. The students noted that English is now 
the primary "second language" being taught, rather than Russian. 

Professor Chang gave the delegation an introduction similar in tone 
to that of Dr. Chou earlier in the day, stressing the difficulties imposed 
by the "Gang of Four" and the Cultural Revolution on the university 
as an institution, on the professors and the students. 

PROGRAM 

Now the university is engaged in a rebuilding program, and has 
defined its tasks into four major areas: 

(1) Improve the quality of education. This will be accomplished 
through remstitution of the entrance examination, as well as 
strengthening the theoretical side of instruction in basic sciences 
and increasing lab work. 



54 

(2) Strengthen scientific research in the university. In connec- 
tion with this, a 3-year graduate study prog-ram has been restored. 

(3) Mobilize the teachers' initiative by applying the party's 
policy toward intellectuals. As an example, professorial titles have 
been restored. 

(4) Administration is to be a combination of the party's leader- 
ship and the University President's responsibility. 

Professor Chans; said that at present there are 2,800 teachers and 
staff and 6,400 students. Xext fall, student enrollment will increase 
to over 8,000. It will rise to about 10,000 in 3 or 4 years, and eventu- 
ally to 20,000. There will be 350-400 graduate students by late 1978. 
The number of day students is currently 200, and may be increased. 
There are over 160 foreign students from 36 countries, most of whom 
come to China under bilateral exchange agreements. 

The curriculum consists of a required course of study for the first 
3 years, with electives possible in the 4th year. All students, regardless 
of field of study, must take courses in philosophy, political economy. 
the history of the Chinese Communist Party, and a foreign language, 
which is usually English. Physical education is taken for 2 years. Each 
year a student will spend about 1 month in industrial work, agricul- 
ture, or military training — stints in all three are normally accomplished 
during a 4-year course of study. 

Asked if any courses had been introduced or reintroduced into the 
curriculum since the fall of the "Gang of Four," one professor said 
there were many such courses, but named only psychology. 

Asked about the present view of Confucius, Professor Chang an- 
swered that he had been "a reactionary." Another professor, however, 
broke in to'explain that while Confucius' thinking had been reaction- 
ary, there were many who held that he had made contributions in 
education and culture. This professor noted that the whole question 
was currently beimr discussed. 3 

Professor Chiang was asked what, if anything, was being done about 
the many college graduates from the postcultural revolution era 
whose educational qualifications were deficient, lie replied that many 
educational qualifications were deficient. He replied that many 
measures were being taken. Those now on Peking University's teach- 
ing staff, for instance, are «-iven only light teaching loads and are given 
the opportunity to restud}'. Remedial English classes are stressed. 
Also, more of these graduates have been hired by the university in 
recent months. 

Given an opportunity to ask questions, one professor asked how 
the United States had managed to accommodate the large increase in 
student enrollment after World War II. It appeared the Chinese felt 
they were faced with (he same task. 

CHIAOTUNjQ UNIVERSITY 

The delegation visited Sinn's Chiaqtung University on duly 11. Our 
host was ( Inuang Li-ting, vice president of the university. He explained 

that his school was an offshoot of Shanghai's Nanyang University, 



■ exchange was noteworthy m nn Illustration <-f thr difficulty even vwr sonh •• 

cated Chinese t have bad following tii«> latest "line" handed down onder tin- "6a uc 

"f Pour, or during the Cultural Revolution. Criticism of Confucius \\;is begun :'.s « wht 
ni criticising Chou Bn-lal, Teng Hsiao-ping's patron, nmi a would-be moderniser. Tim* 
today, the criticism of Confucius implies criticism of Teng, 



00 

which had later had 'tis name changed to Chiaotung. Part of it was 
moved to Sia.n in 1956. A polytechnic oniversity, it has departments 
of mechanical engineering, electrical engineering, radio engineering and 
power engineering. It is one of the 8£ "key" universities under tip- 
direct authority of the Ministry of Education. 

The school has a library of 900,000 volumes, which was in heavy use 
on the day of our visit, since it was the week before final exam-. 

The university has 1,400 teachers and 3,400 students, down from 
the precultural revolution student peak of 8,000. The present plan 
is to increase enrollment by 1,000 a year until total enrollment reaches 
10,000. Of last year's intake of 1,000 new students, about half were 
from Shensi Province and half from elsewhere. 

APPLICANTS 

In Shensi Province, 200,000 applicants took last year's college 
entrance examination. Of these, only a little over 10,000 succeeded in 
gaining admission to some university. 

Professor Chuang mentioned that it was still possible to enter the 
university without taking the examination. For instance, someone in 
his thirties, too old to qualify for the examination, might gain entry 
by writing a type, of dissertation to prove his intellectual rbilities. 

The graduate student program at Chiaotung is just beginning. The 
school will take in about 100 such students this year. Admission is 
through a series of examinations, administered directly by the 
university. 

Professor Chuang mentioned that the size of many classes was 
rather large, because they were being taught by the most experienced 
teachers. In previous years there had been a sort of "track" system, 
since the backgrounds of the students were very uneven and some could 
study faster than others. Now that enrollment is based on standard 
examinations, Chuang felt that such a system may no longer be 
necessary. Language instruction, however, still required differing 
levels of courses. 

Professor Chuang stated that most of the teachers had been trained 
before the cultural revolution, had a good academic background, 
but were now growing old. They also feel they have not been able to 
keep up their scholastic credentials in the past 12 years. The uni- 
versity is now providing teaching assistants to the older professors 
to ease their load. Supplementary training is being given to teachers 
of the middle generation. There is a particular emphasis on language 
training, since Russian is the most common foreign language among 
the older generation and there is a need for competence in English, 
Japanese, German, and French. 

MODERNIZATION 

In addition to these problems, Professor Chuang mentioned that 
two areas where improvements were needed were the modernization 
of facilities and reform of the education system itself. The school's 
electronic instruments, computers, and so on, were all old and largely 
out of date, and needed to be replaced or supplemented. While he 
did not explain what he meant by educational reform, he stated that 



56 

they were currently studying foreign models to see how they might 
organize themselves differently. One thought, for instance, was that 
they should reduce the number of specialties offered at the school. 

There are presently no foreign teachers at the university. They 
would be interested in visiting American professors, however. In fact, 
this question has already been proposed to the Ministry of Education, 
which is responsible for such arrangements. 

In a subsequent private conversation with one of the university 
officials, Congressman Winn asked what was the advantage for the 
United States if we started student exchanges with Chinese univer- 
sities. The official replied that the Chinese were not really interested 
in student exchanges as such, but in getting U.S. professors to teach 
in China. 

The delegation noted, however, that university officials in both 
Peking and Sian were much more open in discussing the possibilities 
of cooperation with, and learning from, foreign countries than had 
been the case on previous visits, as indicated by the official mission 
reports. As this report was in preparation, the United States and the 
Peoples' Republic of China announced a student exchange program 
which will send 500 Chinese students to the United States as the 
first part of what may eventually be a 20,000 student "delegation" 
throughout the West, with 5,000 to the United States, and 2,000 to 
Japan and Britain. 4 



4 Article "Replacing a Lost Generation" by Melinda Liu, Far Eastern Economic Review, 
Sept. 15, 1978. 



SUPPLEMENTARY ANALYSES 
PRC Fokeign Policy 

While exports may differ on the degree to which China's domestic 
policies reflect concern over the Soviet Union, the Soviet basis for 
China's foreign policy is clear. The delegation was repeatedly told 
that combating what the Chinese see as the worldwide aggressive aims 
of the U.S.S.R. must be the common foreign policy aim of the PRC, 
the United States and our various friends and allies. 

RECENT INITIATIVES 

In recent months, Chinese foreign policy initiatives and accomplish- 
ments include: 

(1) Premier Hua Kuo-feng's tour along- the southern border of the 
Soviet Union, with stops in Romania, a Warsaw Pact member, 
Yugoslavia, long at odds with Moscow as a "nonalined" Communist 
nation, and Iran, an arch-foe of Soviet aims in the oil-rich Middle 
East, and on the subcontinent. 

(2) Signing of the Sino-Japanese Treaty of Peace and Friendship in 
several months of concentrated effort, after 6 years of difficult talks. 
The treaty includes the clause demanded by China opposing "hegem- 
onism," the code word for Soviet influence in Asia and elsewhere. 

(3) The announcement by Vice Premier Teng that China would 
not renew the 1950 Sino-Soviet pact when it comes up in 1979 (a move 
related to the Sino-Japanese treaty because of anti-Japanese sections 
of the 1950 treaty). 

(4) Strengthened efforts in African affairs, reaching up to improved 
relations in North Africa and the Middle East. Diplomatic relations 
were opened with Libya, a longtime Soviet ally, and Oman, a Persian 
Gulf state previously branded a "reactionary" regime. 

(5) Improved ties with the Western European nations, particularly 
in trade areas, but also through military missions to the NATO 
alliance. 

(6) A visit by Premier Hua to North Korea prior to his European 
swing. 

(7) As the delegation's report has indicated, a renewed Chinese 
effort at improving the substance of relations with the United States 
through trade, exchanges and strategic consultations is well underway 
despite the absence of formal relations. 

The importance placed by China on signing the Treaty of Peace and 
Friendship with Japan has been frequently noted in this report. To 
date, no active Soviet response against either China or Japan has 
occurred. Moscow has limited itself to harsh rhetorical comment in 
print, and over the airwaves. 

The Japanese treaty, one of two events the delegation was in- 
formed were "the two things Moscow fears most," left the formal 
normalization of relations with the United States as the remaining 

(57) 

35-200— 7 S 5 



58 

major foreign policy goal discussed with the delegation. As indicated 
in the delegation's conversations with Chinese leaders, normalization 
was consistently described as a key to resisting Soviet activities 
against China and the United States. 

U.S. SUPPORT 

"With or without normalization, however, China has made it clear 
that it desires U.S. support through parallel actions in the world 
arena such as the NATO alliance. China sees competition against the 
Soviet Union, despite Western pursuit of detente, the SALT talks, and 
extensive trade and technological exchange, as perhaps the key ele- 
ment in any potential relationship between China and a third party. 

For the United States, Chinese leaders repeatedly warn against 
being misled by "detente," predict no useful, and many dangerous 
results from the SALT talks, and even inveigh heavily against the 
utility of trade and exchange with Russia. 

In his conversation with the delegation, Ambassador Hao Teh- 
ching, President of the People's Insitute of Foreign Affairs, articulated 
a theme (repeated in other meetings) that the United States should 
adopt China's "three methods" in dealing with the Soviets: 

(1) Have no illusions, make concrete preparations against war: 

(2) Move to upset all Soviet strategic deployments; 

(3) Do not adopt a policy of "appeasement" which neutralizes 
military and strategic strength. 

Ambassador Hao frankly stated that China's policy toward Vietnam 
was designed to "upset" the Soviet Union, on the theory that Vietnam, 
for all of its traditional interests in the region, is now basica% a client 
of the Soviet Union. 

Vietnam is Russia's "Asian Cuba," the delegation was repeatedly 
told. "Of course" China's Vietnam policy is aimed at Russia, Ambas- 
sador Hao said: "On the surface we are struggling against the small 
hegemonist power, Vietnam, but in reality we are struggling against 
the bigger hegemonist power." 

Facing the "reality" of the struggle against Soviet policy prompted 
Chinese officials to recite a litany on how they viewed Soviet activity 
around the globe. Beginning with Cuba itself, "right under your nose," 
Chinese officials cited Africa, particularly Zaire and Ethiopia, the 
Middle East, focusing on South Yemen, and exhibited great concern 
over the coup in Afghanistan. Vietnam was portrayed as an active 
Soviet base threatening Western trade and military communications 
in Southeast Asia, as well as with Japan and the Pacific. 

While the delegation meetings stressed the need for parallel action 
by the United States, in recenl months, the PRC has actively pursued 
a pattern o!' diplomatic initiatives which would appear to be unparalled 
in her history. 

BREAKING ENCIRCLEMENT 

A- one senior ( Chinese official put it, "There is some talk in the world 
that the Soviet QnioD is encircling China, but (lima is not afraid of 
encirclement. When you look at the history of the Chinese revolution 
we have grown in periods of encirclement, and have broken a lot of 
encirclen ■ 

This theme of "breaking encirclements" would seem to provide the 



59 

best framework for charting the series of moves including diplomatic 
missions culminating, to date, in Premier II ua Kuo-feng's "campaign 
swing" along Russia's southern flanks. 

Premier Hua's stops in Romania, Yugoslavia, and Iran were till 
punctuated by anti-Soviet speeches of varying degree, and calls for 
recognition of common interests in resisting "hegemonism," the well- 
known key to the Sino-Japanese peace treaty. 

However, while Premier Hua's visits received worldwide publicity, 
they were only the latest in an ongoing series of personal diplomatic 
initiatives by senior PRO officials. Among the more significant were: 

(1) Foreign Minister Huang-hua visited Zaire for conferences with 
President Mobutu in June, c en as France and Belgium were moving 
to counter Cuban-Soviet military ventures in Shaba Province. The 
Foreign Minister also visited Belgium, Turkey, and Iran, making 
speeches identical in tone to those heard by the delegation, and those 
delivered by Premier Hua on his August mission. 

(2) Vice Chairman Chi Peng-fei of the National People's Con- 
ference visited South America in June, one of the only such Chinese 
visits on record. Before journeying north to Canada, Chi spent a week 
in Mexico. 

(3) Vice Foreign Minister Ho-ying toured Kuwait, Jordan, and 
Syria in late June. 

(4) Vice Premier Kane,- Piao, a Politburo member, spent 2% weeks 
in Pakistan and Sri Lanka in June-July. In late July, he left for a 
15-day Caribbean tour of Trinidad-Tobago, Jamaica, and Guyana. 
Xo Chinese Vice Premier and ever visited this region. 

(5) Vice Premier Chen Mu-hua, a foreign trade expert and head of 
Peking's foreign aid program, was in the midst of an African mission 
as this report was in preparation. Stops at that time included Somalia, 
Cameroun; and Gabon. Expected stops included Senegal and 
Mauritania. 

Chinese diplomatic missions scheduled as this report was being 
prepared included stops in Turkey, Egypt, Sudan, Ghana, and Guinea. 
In addition, Vice Premier Teng was scheduled to visit Japan during 
October, and Premier Hua to visit Western Europe in 1979. 

THREE WORLDS 

The policy lines expressed to the delegation, and confirmed by 
Chinese actions in 1978, would seem to be signaling a modification, if 
not a shift away from what had been presumed to be a cornerstone of 
Maoist Chinese foreign policy — the so-called "three world's theory." 
The delegation has expressed its conclusion that the current under- 
pinning of PRC foreign policy is what the Chinese see as the need to 
combat the Soviet Union on a worldwide basis. 

But under Mao's "Theory of the Three Worlds" the Soviet Union 
is not the sole target of Chinese activity. According to Mao, the world 
is divided into three competing "worlds," or categories: The first world 
of the two superpowers, the Soviet Union and the United States; the 
second world of the remaining industrialized nations; and the third 
world, including China, comprised of all the developing nations. While 
Mao saw the United States as the more "benign" of the two super- 
powers, with the Soviets characterized as "arch social-imperialists," 



60 

the task of Maoist foreign policy was primarily to rally second world 
nations into an alliance with the third world against the superpowers, 
even though the second world nations themselves "exploit" the third 
world. 

While Mao felt the United States might be "enlisted" in the 
struggle against the Soviets, the foreign policy trend perceived by the 
delegation — when coupled with the trade and economic initiatives now 
being pursued by China — would seem to signal a potentially much 
more positive Chinese view of the Western nations. 

Some experts have commented 1 that to date, PRC diplomatic mis- 
sions have concentrated on the "third world" nations; thus, the 
1978 initiatives may represent as much an effort to enhance Chinese 
political and economic influence in its own right as they signify an 
anti-Soviet campaign. 

SOVIET RESPONSE 

In this sense, experts note, Western decisions to help meet what are 
perceived as common foreign policy aims by selling arms or sophis- 
ticated technology to China will serve a dual function, despite the 
West's purpose. Soviet response to Chinese initiatives and possible 
Western responses have so far been largely rhetorical, and have sought 
to stress the idea that helping China is a double-edged sword. A 
Pravda editorial has warned: 

All those who help China to arm itself are acting contrary to the striving of 
peoples toward detente and toward strengthening peace on earth. 2 

The editorial was not simply concerned with prospective European 
arms sales, as it made clear by adding: 

Hardly a month passes without another Chinese emissary appearing in the 
capital of one or another country, whether belonging to NATO or not. 

It is within the context of the Sino-Soviet struggle as manifested in 
the ideological debate over Mao's "Three World's" theory that 
China's break with Albania — once its only European ally — can be 
explained. 

Exactly 1 year prior to China's July 7, 1978, announcement that all 
aid to Albania would be ended, the leaders of the small, Adriatic Sea 
state between Greece and Yugoslavia called the "Three World's" 
theory a cover for Chinese "hegemonism," and Chinese plans to 
become a "superpower." 

Even worse, according to the Albanians, the "Three World's" 
theory was designed to cover a Chinese plot to ally with the "U.S. 
imperialists am! the monopolists of Europe, with fascists and racists, 
kings and feudal lords, most rabid militarists and warmongers * * *" 3 

The Albanian charges, coupled with Soviet reaction to Premier 
Jinn's European mission, showed the depth of displeasure motivating 
political leaders and strategic planners in Moscow, if not elsewhere. 

Jt should be borne in mind that the Sino-Soviet "war of words'' 
cannot be brushed aside as mere rhetoric For example, as noted, the 

laweek of Dec. .".<). iott and Aug. 25, i!)7s. 
" Baltimore Sun article by Henry Trewhitt, Aug. 25, u»7.^. 
■ Taken from a letter circulated in foreign capitals by Albanian diplomats with the date 

Jills •_".», 1078, as quoted l).\' Asiaweek of Sept. 1, 1!)7S. 



61 

Chinese consistently warned the delegation against the pursuit of 
definitive SALT talks with the Soviet Union. The Soviet-, too, have 
cited SALT as a factor in United States-China relations, although 
from a reverse perspective. On August 26, a statement from the 
Politburo called China a "serious threat" to peace, and hinted that a 
SALT agreement could be washed away by Western military sales 
to China. 4 

ARMS SALES 

As of this writing, Chinese military missions to Europe and the 
NATO countries have reportedly concluded agreements with France 
for antitank and antiaircraft missiles, Germany for helicopters, and 
Britain for jet engines. PRC missions have reportedly expressed 
interest in the West German Leopard tank, Italian rapid-fire artillery 
systems, the British Harrier vertical-takeofT jet, and British transport 
aircraft with military capacities. 

The French purchase is the largest reported to date, covering per- 
haps as much as $700 million. 5 The French deal, negotiated despite 
reported Soviet ''pressure," was noteworthy because of public French 
statements that France would sell arms according to its own policies, 
regardless of outside pressure. The same report, however, also noted 
that the French apparently plan to sell only what they feel are de- 
fensive weapons, and that no deal was made on the sophisticated 
Mirage F-l jet fighter precisely because of concern over Franco- 
Soviet relations. 6 

While the United States is reported as having "quietly made it 
clear it will not oppose such sales to China by European countries," 
the nations of Europe have yet to develop, or at least announce, a 
clear policy on the sales. 7 

No such indecision is reflected in Moscow. In expressing displeasure 
as of August 26, well before the announcement of the French sales, 
the Politburo reversed the language of the PRC to the delegation. 
Arms sales discussions, the Sino-Japanese treaty, and Premier Hua's 
Eastern European mission prompted this from Moscow: 

The Politburo underscores the serious threat presented to the cause of peace 
and socialism by the action of the current leaders of China. In pursuing their 
great power, hegemonic course, Peking openly places stake on the increase of 
international tension and is using all means to undermine the position of the 
socialist community. 8 

As noted, Ambassador Hao freely admitted to the delegation that 
China's Vietnam policy is anti-Soviet. The Politburo statement from 
Moscow linking the future of SALT to Western arms for China also 
called China's Vietnam policy "direct expansionist action." 

Thus, the delegation and Western decisionmakers face a situation 
where each side in the Sino-Soviet dispute makes similar charges about 
the other and demands potentially contradictory actions by the West 
as the price of friendship. 



* Washington Post article bv Dusko Doder. Aug. 27, 1978. 

5 Reuter's item in Washington Post, Oct. 21, 1978. 

6 Christian Science Monitor article "France Moves Ahead on China Arms Sales'' by Jim 
Browning, Oct. 24, 1978. 

7 Oct. 24 article in Cbristian Science Monitor. 

8 Aug. 27, 1978, Washington Post article by Dusko Doder. 



62 

Normalization : PRC and the ROC 

The delegation has sought to stress its perception of a "new realism' 
in the People's Republic of China regarding the issue of American 
concerns and interests with the Republic of China (Taiwan). Dis- 
cussion of the fact that the Kuomintang and the Communists twice 
in their history had cooperated was clearly intended to make an 
impression on the delegation. 

In its report, the delegation has also sought to make its own 
historical reference to the dispute over the Republic of China, par- 
ticularly the 1955-56 offer by the PRC to negotiate a treaty with the 
United States which would include a clause on peaceful settlement 
of the Taiwan issue. 

As we have said, the 1955-56 offer and negotiations made it clear 
that while the PRC might be prepared to renounce the use of force 
vis-a-vis formal U.S. interests, their position in 1955-56 and 197S on 
Peking-Taipei relations is identical; namely, that "sovereignty" 
prevents any pledge of nonviolence. 

As stated, the delegation is under no illusions as to the continuing 
strong line in Peking regarding the legal form of normalization between 
the United States and China — as seen by Peking. However, the 
delegation has sought to emphasize why it feels that even though 
the PRC indicates its "three points" (involving formal U.S. with- 
drawal from diplomatic and military agreements with the Republic 
of China) are nonnegotiable, in practical fact, the substance of normal- 
ization — the "realities" and "modalities" discussed in Peking — may 
hold promise of flexibility, and should be explored. 

A joint appearance by representatives of the PRC and ROC at 
a scientific conference in Tokyo took place on August 24. This is the 
firsl <uch recorded occurrence of its type. In the past, even if both the 
PRC and ROC had accepted invitations, one or the other had 
cancelled in order to avoid just such a joint appearance as occurred 
in Tokyo. 

Recently, a solid economic indicator of pragmatism, at least on the 
pari of the PRC 1 has come to light. According to official trade 
statistics released by Hong Kong, pro-Peking businessmen in the 
British colony have been encouraged to reexport goods to Taiwan. 
Figures for January to May 1978 show $16.1 million in goods reaching 
Taiwan from the PRC, via Hong Kong. Experts have noted that these 
figures do not reflect the "substantial" amount of PRC goods 
gled into Taiwan. 9 

delegation has noted, an emerging pattern of more pragmatic, 
more realistic approaches and actions py the PRC, not just in foreign 
policy, but in all areas would seem to be underway. Further, this 
pattern has historical precedent. 

A for i he ROC, v uch pattern can be discerned at present 

• official vcl, the fad remains that her delegates were not 
recalled from Tokyo, ll is (rue that when the delegation's initial 
conferences suggested a possible willingness on the part of 
Peking to negotiate with the Kuomintang, negotiations were rejected 
outright by officials in Taipei. Tins is consistent with policy in Taipei 
since L949. But it is also true that despite the often harsh rhetoric 



i:i the Economist, "Velvet Glovery," Sept. L6. nu^: Par Eastern Economic 
Review, "Taiwan's Secrel 'Peace' With the Mainland," by Mellnda Liu, Oct <*», 1078; and 
Asiaweek, "Autumn Fever," Oct 18, r.»Ts. 



63 

still employed by both sides in the Chinese Civil War, no serious 
military action between the two has occurred for 20 years, pris< 
exchanges have taken place, and informal recognition of each other's 
airspace for military and commercial flights clearly exists. 

In the following section, a review of the respective positions of 
leaders in the PRC and the ROC on the normalization issue since 
1971-72 may help those attempting to analyze the events o!" the 
]) resent day. 

As noted, in 1956, Peking suggested a bilateral agreement with the 
United States specifically renouncing- the use of force in the Taiwan 
area. While such action in 1978 apparently cannot be expected, if the 
tone and content of the delegation's conversations in Peking continue 
to represent Chinese policy regarding the use of force, the historical 
fact remains that at least once, Chairman Mao and his associates 
were willing to explore such a proposal. 

PRE-1972 PRC VIEWS ON NORMALIZATION 

During the period prior to President Nixon's visit to Peking in 1972, 
PRC spokesmen had remained rigidly uncompromising on the subject 
of normalization and had refused to ease tensions with the United 
States unless the United States first withdrew its forces from Taiwan 
and ended official ties with the Taipei Government. 

Since the signing of the Shanghai communique during President 
Nixon's visit to Peking in 1972, PRC spokesmen have reaffirmed their 
demand that the United States must withdraw all forces and break 
official ties with Taiwan before full United States-Peoples Republic 
of China diplomatic relations can be established. But Peking's sense 
of urgency over the normalization question, and its concern over the 
related issue of the "liberation" of Taiwan, have varied widely over 
the past 6 years. 10 

During 1972 and 1973, PRC spokesmen adopted a low-keyed ap- 
proach on normalization. Despite continued active U.S. official 
relations with Taipei, Chinese leaders agreed with the United States 
to increase bilateral exchanges and to establish official liaison offices in 
Washington and Peking staffed by senior diplomats. Peking media 
avoided criticism of the United States over the normalization issue, 
and they softened past rhetoric regarding Taiwan. In particular, 
Peking comment encouraged "people-to-people" contacts between the 
mainland and Taiwan, sharply reduced criticism of the Nationalist 
administration, and — for the first time in two decades — called for 
peace talks with the Nationalists and the "peaceful" liberation of 
Taiwan. 

China's approach hardened in 1974 and 1975. Some experts feel this 
reflected Chinese impatience with the lack of forward movement in 
Sino-United States relations during that period. However, China's 
posture} also appeared to have been influenced by PRC domestic 
politics, as leftist Chinese leaders — the now smashed "Gang of Four" — 
fomented major domestic ideological campaigns which led to a harder 
line in Peking in foreign policy. During this time, Peking spokesmen 
occasionally criticized the United States for not living up to the 
"spirit" of the Shanghai communique. They also put aside their 

10 For background on these issues, see Dr. Robert G. Sutter, "Chinese Foreign Policy 
After the Cultural Revolution, 19G6-77," Westview Press 1978, pp. 94-113. 



64 

previous, relatively mild approach on Taiwan's liberation, and began 
to warn that Chinese Armed Forces were ready to attack the island. 
Peking's policy appeared to shift again in the latter part of 1975, 
when spokesmen reverted to a more low-keyed approach regarding 
Taiwan. Chinese leaders at the same time showed great concern over 
what they saw as a decline in U.S. strategic resolve to resist Soviet 
"expansionism" in international affairs. They saw the decline as re- 
sulting from American domestic and foreign difficulties such as the 
U.S. Watergate crisis, the 1974-75 economic recession, and the collapse 
of the U.S. -supported governments in Indochina in 1975. Accordingly, 
Chinese spokesmen took pains to emphasize their interest in a more 
resolute U.S. policy against the U.S.S.R., while they "softpedaled" 
past expressions of concern over the normalization of United States- 
Peoples Republic of China diplomatic relations. 

TENG IN 1975 

Vice Premier Teng Hsiao-ping was unusually explicit about Peking's 
priorities during a December 1, 1975, banquet address for President 
Ford. While Teng devoted only routine attention to United States- 
People's Republic of China normalization, expressing confidence that 
diplomatic relations would be established "eventually," he devoted 
unusual stress to what he called "a more important question" involving 
the need for greater U.S. vigilance against Soviet "expansion." He 
said that "the crucial point is what line or policy" the United States 
and China would pursue in the face of this mutual threat. He exhorted 
the United States to follow Peking's example, not to fear Soviet 
"hegemonism," but to form a broad international front against it and 
to wage "tit-for-tat struggle." " 

Teng was demoted in early 1976, leading to the temporary rise to 
power of the leftist "Gang of Four" — a development which apparently 
lead to a hardening of Peking's line on normalization. Thus, for ex- 
ample, Senator Hugh Scott was strongly impressed with the virulence 
of Chinese discussions on normalization and the liberation of Taiwan 
dining his July 1976 talks in Peking with Vice Premier Chang Chun- 
chiao, a prominent member of the "gang." 12 Chairman Wolff and 
Representative Burke, during their April, 1976 mission, received what 
may have been the "dress rehearsal" for Senator Scott. 13 

"gang" purged 

The purge of the "Gang of Four" and other leftists in October 1976 
resulted in a return to a more moderate approach toward the United 
Si ales. For several months in early 1977, Chinese spokesmen repeatedly 
made statements underlining Peking's firm commitment to the three 
conditions for United States-People's Republic of China normali- 
zation—statements which were perhaps prompted by the repeated 
suggestions then emanating from Washington regarding possible 
compromise formulas for United States-People's Republic of China 
Dormalizat ion. 



'v China News Agency, Dec. 1, 1975. 
Normalisation <»(' Relation! with the PRC: Practical Implications." Hearings before 
tii*- Subcommittee on Asian ;i n » t Pacific Affairs of 1 1 « < - House Committee on international 
Relations. D.S. Qovernmenl Printing Office, n»77. pp. :;-^2 340. 

» See "United states china : Future Foreign Policy Directions, 1070." Subcommittee on 
Future Foreign Policy, DSOPO. 



65 

Since the middle of 1977, Peking lias avoided criticism of the United 
States concerning the normalization issue and has repeatedly expresse< I 
understanding and patience over the difficulty the United States Paces 
in breaking its ties with Taiwan. 14 A high-level Chinese leader this 
year went so far as to alert the Chinese people that he judges that 
normalization may be delayed. Yeh Chien-ying — the second most 
important leader in the Chinese Communist Tarty — capped an effu- 
sive welcome for a group of U.S. visitors on May 19, 1978, by remarking 
in a straightforward passage that "it requires great exertion and time 
to realize the normalization of relations between China and the United 
States." Yen's remarks — the most explicit Chinese official statement 
of the potential delaying effect of U.S. domestic political concerns 
were widely broadcast to Chinese and foreign audiences by Peking's 
New China News Agency. 15 At the same time, Chinese leaders have 
used private meetings with U.S. visitors in recent months to reaffirm 
repeatedly Teng Hsiao-ping's admonition to the United States in 1975: 
They have noted that the formal establishment of United States- 
People's Republic of China diplomatic relations is less important to 
China than the development of a common Sino-American strategy 
against the U.S.S.R. 16 

THE REPUBLIC OF CHIXA (TAIWAN) AND NORMALIZATION 

ROC leaders have also adopted various approaches to the issue 
of United States-People's Republic of China normalization in recent 
years. 17 Some officials have expressed confidence that the United States 
would soon perceive the alleged "futility" of trying to normalize 
relations with Peking, and would halt the process before it seriously 
compromised United States relations with Taiwan. 

Other officials of the ROC have been less sanguine about future 
developments, and have shown serious anxiety over the possibility 
of the United States accepting Peking's three conditions. They have 
warned that U.S. support for Peking's terms would result in major 
political and economic crisis on Taiwan. They judge in that United 
States-People's Republic of China normalization would lead to a 
collapse of the Republic of China's political institutions,fand would 
prompt the Nationalist authorities to adopt strong authoritarian 
measures in order to maintain order and unity on the island in the face 
of "threat" from the mainland. As mirrored by some witnesses before 
the subcommittee, these officials also warned that following an official 
U.S. break with Taipei, businessmen on Taiwan would withdraw from 
the island, leading to a major economic collapse|there. 

Still other leaders on Taiwan think that normalization is likely to 
occur in the near future, but judge that it would not have serious 
adverse eil'ects on Taiwan's well-being, provided there were no im- 
mediate likelihood of a PRC military attack against the ROC. These 
spokesmen point to the recent record of Taiwan's economic develop- 
ment; they note in particular that the econonry grew substantially 

14 On the latter point. sep Senator Cranston and Representative Whalen, the United 

States and the People's Republic of China. Report of the Sixteenth Congressional Delega- 
tion to the PRC. U.S. Government Printing Office, 1978, p. 13. 

• NONA, May 19, 1978. 

16 See in particular the Cranston-Whalen report. 

:: See "Normalization of Relations with the People's Republic of China : Practical Impli- 
cntions." hearings before the Subcommittee on Asian and Pacific Affairs, U.S. Government 
Printing Office. 1977. 



G6 

during the early 1970's, even though the Taipei Government had 
suffered numerous serious political and diplomatic setbacks during 
that period. They believe that Taiwan's economy would probably 
continue to prosper, even after United States-People's Republic of 
China normalization. 

In regard to political stability, these spokesmen point out that the 
political setbacks Taipei suffered earlier in the 1970's can be viewed 
as having had an overall positive effect on internal political stability 
in the ROC. The reversals caused the dominant group of Chinese 
leaders on the island, who came to Taiwan from the mainland in 1949, 
to open some higher government positions to Taiwanese. These moves 
they claim, have helped ease the political discontent of the Taiwanese 
natives, who make up about 85 percent of the island's population and 
have been particularly resentful over their past inability to play a 
major role in national governmental affairs. 

Trade and Economic Development in the PRC 

Even as our delegation met with the PRC's leadership in Peking, 
lower ranking bureaucrats were engaged in detailed negotiations with 
trade and business representatives from Japan, the United States, and 
Western Europe. 

The Vice Trade Minister made clear to the delegation what has 
become strikingly evident in the weeks since our visit — China plans 
to substantially increase her imports and exports, with equally sub- 
stantial implications for China domestically, as well as for world 
economies. 

According to statistics released as this report was in preparation, 18 
United States-China two-way trade increased 175 percent in the firsl 
9 months of 1978, compared to a similar period in 1977. In absolute 
terms, the sums involved — $441.4 million in 1978 versus $249.4 million 
in 1977 — are not substantial. As with other Asian nations, the United 
States ran a trade deficit with China for the first hall' of 1978, with 
U.S. imports of Chinese goods totaling $246.9 million. 

The initial phases of the 1978 increase are attributed to the fact that 
for the third year in a row, China in 1977 experienced a bad harvest. 
Consequently, the Chinese have reentered the U.S. grain market for 
the first time in 4 years, purchasing $280 million in shipments to be 
spread out over 1978-79. Another bad harvest has been announced 
this year, and further grain purchases were being discussed as this 
report was in preparation. Funds for these grain purchases extend into 
China's hard currency pool, and may affect the PRC's ability to pay 
cash for development programs beyond the immediate future. 

WORLD TRADE 

Foreign analysis of China's economy indicates that the PRC's 
worldwide trade for January to June 1978, reached $19 billion, a 30- 
percent increase over the 1977 totals. For the first half of 1978, ( Chinese 
economic officials did not issue absolute figures, but indicate a per- 
centage increase in exports of 28.5 percent, and a 60-percent import 



w Statistics through September 1078, compiled by the National Council for United 
State China Trade. 

» Washington Posl article "China Double! Trade with United states. Considers Foreign 
Capital," by Jay Mathews, Sept 10, 1078, article in Asiaweek, Oct 18, 1878. 



67 

A comparative note of caution: While the "China trade" dollar 
amounts are relatively large, and will grow Larger, tli<» fact ren as 
that in 1977, Japan, for example, still exported more to the Republic 
of China (Taiwan) than it did to the PRC. 

But if current PRC plans take firm root, foreign trade will inci 
rapidly both in percentages and absolute dollar amounts. At a con- 
ference on finance and trade in Peking shortly after the de 
departed, Vice Premier Yu Chiu-li, Chairman of the State Plat) 
Commission, announced that special factories and industrial i 
wouid be set aside to produce export goods. In a significant break with 
past PRC policy, it was announced that these plants would import 
basic technology and equipment. Of perhaps more interest at the ; ime 
of the announcement, it was noted that among the devices planned 
to finance the plant would be so-called "payback" schemes modeled 
on development policies carried out by Lenin and Stalin in 19 
Russia. 

"Paybacks," in which the plant's products are used to pay off 
development costs, seemed earlier this year to be an emerging Chinese 
preference to financing industrial modernization and expansion through 
direct loans. In that way, it was thought, China hoped to avoid the 
economic graveyard inhabited by so many other developing nations. 
Chinese leaders were obviously mindful of the Russian experience of 
recent years, where despite rhetorical or ideological inhibitions, the 
Soviet Union managed to run up a foreign debt of some $17 billion. 

DEVELOPMENT CAPITAL 

But if China remains committed to pay for most of its short-term 
imports in cash or "payback" agreements, the ambitious development 
plans now being announced in response to the strategic challenge of 
the Soviet Union have clearly prompted a reassessment of how be.^t to 
generate long-term development capital. 

Expert observers had estimated that with hard currency reserves 
of between $3 billion and $4 billion, the PRC would be able to 
finance its presently announced development plans without any loans 
for 1 to 2 years. 20 

Events since the delegation's visit moved more rapidly than any 
of the experts had predicted, however, and it is now a matter of record 
that the PRC has decided to explore direct loans to finance those 
development plans which cannot be funded by paybacks, or other 
methods. In retrospect, it can now be seen that this decision, which 
became public during September negotiations with the Japanese, 
had been publicly anticipated by PRC' leaders. 1 ' 1 

Vice Premier Yu Chin-li, at the Peking Conference on Finance and 
Trade, noted the need to "receive and use foreign deposits in a planned 
way." 22 An explicit statement on China's willingness to accept private 
bank loans was attributed to Vice Premier Li Hsien-nien. 23 Earlier 
sources indicated Chinese willingness to accept private bank loans 
through the Japanese Export-Import Bank, although not official 

^Washington Post article "China Doubles Trade With United States," by Jay Mathewg, 
Sept. 10, 1978. 

12 Oct. 13. 1078 article "Peking's Yen for the U.S. Dollar." in Par Eastern Economic 
Review ; in a perhaps ironic footnote, the PRC reportedly has asked that the Japanese 
loan be made in U.S. dollars, even though the interest rate would be higher, because of 
the difficulty of meeting payments in yen over the years. 

~ Wall Street Journal article bv Frank Ching, "China Hints at Economic Policy Change," 
Ausr. 25. 1978. 

23 Wall Street Journal article by Frank Ching. 



68 

Japanese Government loans through Japan's Overseas Economic 
Cooperation Fund. 24 

In any event, a lon°'-term trade agreement between Japan and the 
PRO announced in February has been consistently estimated to in- 
volve $20 billion. 

While loan negotiations with the Japanese were still being carried 
out, British banks had already established a $100 million deposit, 
called by some observers "akin to a line of credit," to finance British 
exports to China. 25 

This device of allowing buyers and suppliers export credits is also 
new for PRC policymakers, one which allows them the benefits of 
direct loans without undue ideological risks to a development policy 
which has by no means rejected all aspects of independence and 
self-reliance. 

To show the level of commitment already undertaken by China in 
the last few months, a quick survey of three basic industries — steel, 
petrochemicals, and oil is instructive: 

(1) Steel. — Of China's planned 120 major new industrial projects by 
1985, 10 will be steel mills large enough to process raw ore into finished 
products. The Chinese plan to nearly triple the 1978 output of 26 
million tons. Without commenting on the feasibility of this plan, 
experts estimate that it will cost China some $2 billion to upgrade 
existing steel mills with techniques and equipment available in the 
West. Further, anywhere from $20 billion to $40 billion may be nec- 
essary to finance construction of the 10 new plants called for by 1985. 
West German and Japanese firms are already in competition for the 
first installments of this massive project. 26 

(2) Petrochemicals. — As of January 1978, more than 30 petro- 
chemical and fertilizer plants were being built in China by Western 
contractors. Much of the expertise and technology involved in these 
projects are under license by the major chemical manufacturers of the 
West. 

Since the beginning of July alone, at the same time the delegation 
was in the PRC, seven petrochemical or fertilizer projects have been 
announced, with the total value of more than $300 million. Four of the 
projects went to West German or Japanese firms. 

Experts note that Chinese missions in Europe as this report was in 
preparation were discussing short-run PRC needs for seven petro- 
chemical or fertilizer plants, and longer range needs for six large 
ethylene crackers (the base unit around which a petrochemical com- 
plex can ho constructed). While the Chinese planned to do as much 
of the basic site work as possible, each of the plants could cost up to 
million. 27 

(3) Oil. -In the past several months, PRC representatives have 
latcd with U.S. oil companies for up to a half-dozen offshore 

drilling rigs. Prices per rig are in the $75 million range. 

( 'lima now has an estimated offshore oil reserve of 45 billion barrels, 
with a reserve on the mainland variously estimated at another 5 to 20 
billion barrels. (Saudi reserves are estimated at 149 billion barrels.) 

In 1977, the PRC exported some i:>0,000 barrels of crude oil a, <\;\y 
to Japan. Shortly after our delegation returned to Washington, China 



• v,.\v y,,rk Times n rt i<io hv u. Bcott-Stokes, "China Strengthens Tics With Japan," 
.Tuiv 28, 191 

Economist, London, Aug. 19, 107s . 
Article, "China: Oiling tin- Doors," in tin- EDconomlst, Aug. 19, 1978. 
"Article in tin- Economist, "Oiling the Doors." Aug. 19, 1978. 



69 

and Japan announced an agreement on joint development of oil 

resources in Pohai Bay, directly across from the Korean Peninsula. 
The same announcement by the Japanese Government-owned Na- 
tional Oil Corp. said agreement has also been reached to study 
feasibility of joint development of oil resources at the month of the 
Pearl River, which flows through Canton into the South China Sea. 
The Chinese do not restrict their potential oil development to Japan. 
As noted, while the delegation was in Peking, members and staff met 
informally with representatives of several major U.S. oil companies 
It was subsequently reported that on May 2, the Liaison Office of the 
People's Republic of China in Washington, D.C., called Ambassador 
Christopher Phillips, head of the National Council for United States- 
China Trade, asking him to deliver official invitations to the heads of 
Exxon, Pennzoil, Union Oil, and Phillips Petroleum. 28 

In 1977, Peking purchased $150 million in onshore oil exploration 
and development tools from U.S. companies for use without outside 
help. The first half of 1978 saw $250 million purchased from U.S. 
companies. Negotiations between the PRC and the four American 
companies invited to Peking at the same time as the delegation were 
still in progress as this report was being prepared. Results of the 
negotiations should provide evidence for how much foreign participa- 
tion the PRC plans to allow, as well as indicating how much 
"prenormalization" trade the United States might expect to carry out 
with China. 29 

Modernization : The Workers and the Peasants 

All of the PRC's ambitious development plans will come to naught, 
of course, if China's urban workers and rural peasants cannot, or will 
not, perform. This is not an idle question, and in the past few months, 
policymakers in Peking have been addressing themselves to it. As 
noted, the delegation heard discussion of a return to wage incentives, 
among other inducements. The problems in urban areas are deeper 
than that, as the experience of the Cultural Revolution illustrates. 

industrial workers 

Factories were among the hardest hit of China's institutions during 
the turmoil of the Cultural Revolution. For the same reasons that 
China's universities and technical training centers were disrupted 
by the primacy of ideology over practice, China's factories suffered 
severe drops in efficiency and production. Experts attribute this to 
low morale amongst workers as much as to any ideological commitment 
on the part of the average worker. 

Just as the general policy debate has shifted to favor the expert 
and the pragmatist, so has the factory management policy shifted. 
While many factory or industry heads rose to power during the 
Cultural Revolution because of their political purity, rather than any 
particular industrial expertise they might have possessed, likewise the 
individual workers were encouraged to join Revolutionary Committees 
to run the entire factory or industry, regardless of the worker's lack 
of management or planning experience. 

as Washington Post article "China's Oil" by Hobart Rowen, Aug. 11. 1978. Pennzoil 
officials have been quoted as saying they were asked to draw up offshore exploration plans, 
with the most likely target beinj; the South China Sea. 

28 Article. "China's Tough Oil Bargain," in Far Eastern Economic Review, by James 
Srodes, Sept. 1, 1978. 



70 

One of the first steps announced in early 1978 was the abolition of 
the Revolutionary Committees in all aspects of China's professional 
activities, from factories to universities. But persistent accounts 
appear of committees in many regions clinging to at least a share of 
the power. 

Wages and wage incentives form another area where China's new 
realism has produced new, and in this area, considerably revised 
approaches to spurring production. Even prior to Teng Hsiao-ping's 
return, China's wage scales left nothing to be desired from the bureau- 
erotic standpoint, resembling in complexity, if not munificence, the 
Civil Service charts in the United States. 30 

INCENTIVES 

Shortly after the delegation returned from China, it was reported 
that So percent of China's factoiy workers had received small raises 
of about $3 per month. 31 

Among the dilemmas now being faced by Vice Premiers Teng, Yu, 
and others involved in the modernization effort is how to use wage 
hikes as production incentives without creating massive inflation. 
As noted, the delegation was told that China planned to increase 
production of consumer goods. Given the relatively low salaries and 
high cost of those consumer goods normally available which are not 
necessities such as bicycles, watches, cameras, radios, and those which 
arc rationed, such as food and clothing, experts agree that there is 
room to absorb pay hikes within the Chinese economy so long as 
production keeps pace. 

Since the government controls all aspects of the economy, an 
obvious "anti-inflation" device would be to hike prices to keep pace 
with wages, but the self-defeating nature of that measure would seem 
obvious in view of the stated goal of the planners to increase produc- 
tion through improved worker's morale. 

Alter being discredited for radicalism during the hey-day of the 
"Gang of Four," China's "unions" have been directed to reorganize 
and aid in the campaign to improve production. Patterned primarily 
on the Soviet model, the unions are organized on a factory by factory, 
rather than industry-wide basis. While they on occasion can take up 
dual worker grievances with "management," they are not 
expected to engage in industrial action or strikes. 

lericans and other foreigners who have worked in Chinese factories 
during and after Cultural Revolution have noted that the work pace 
Is very slow, the working conditions frequently inadequate by Western 
standards, and the machinery in ill-repair, and out-dated. One observer 
commented in 1977 "If the workers had been functioning at anything 
resembling a reasonable work pace, the factoiy could probably have 
doubled its output. Bui quotas were set so low, apparently so that 
they could be filled without difficulty, and anyone who wanted to 
speed things up risked being criticized by his workmates." 82 

tlstlca] Information In this section conies primarily from articles in the Far Eastern 
■ .v. principally t he Issue <»f Jan. -1 , 1978. 
SVashinfirton Pos1 article. "Chinese Discipline," by Jay Mathews, July 28, 1978. 

tern Economic Review, Jan. 27, 1978 and the Washington Post article by Jay 
Mathews of July 28, 1978. 



71 

PAY SCALES 

Instituted in 1956, modified in 1902 and 1966, and under scrutiny 
at the present time, tin 4 wage scale for China's aonagricultural work 

force (all are employed by the State) has three distinct categor 
employees: workers, administrators, and technical personnel. Their 
grades and salaries as of October 1977 were a> follows: 

(1) Workers have eight grades, or steps, ranging from a low of '40 
Rmb a month ($18) to a high of 100 Rmb (860).' 

(2) Administrators have no less than 25 grades, with a monthly 
low of 30 Rmb, and a peak of 450 Rmb (c $270). 

(3) Technical personnel have 13 grades, from a low of 45 Rmb 
(c. $27) to a monthly high of 340 Rmb (c. $204). 

At the same time, Peking established 11 different wage regions 
nationwide. Under this system, workers, administrators and technical 
personnel in the same grade would receive slightly different salaries, 
according- to where they happened to work. To further differentiate, 
special bonuses were paid to workers assigned to remote locations, 
such as Tibet or Sinkiang. Finally, specific occupations were granted 
slightly higher compensation than others, for example, a highly skilled 
artisan might make 3 Rmb (c. $2.40) more a month than a steelworker 
in the same grade. 

All wages prior to an announcement of a general hike in October, 
1977, had been "frozen" at 1962 levels. In October, Vice Premier 
Yu Chiu-li, Chairman of the State Planning Commission, announced 
a general wage rise of one grade on the pay scale for 60 percent of 
China's nonagricultural workers — some 40 million people. Yu said 
that those affected were primarily on the low end of the wage scale. 
Experts estimate that if a raise of just 10 Rmb (c. $6) a month is 
involved for each individual an annual hike of some 4.8 billion Rmb 
(c. $2.8 billion) would occur for the national money supply. 

AGRICULTURAL WORKERS (THE PEASANTS) 

Since SO percent of China's 900 million people still live in the coun- 
tryside, it is axiomatic that the success of the PRC's modernization 
programs will hinge on success in agriculture. Peasants, like everyone 
else in China, work 6 days a week. While their educational and medi- 
cal opportunities have vastly improved, in terms of their daily life, 
the peasants perhaps more than any other group in China still live and 
work much as they have since the earliest times. 

The PRC is not self-sufficient in production of food — as noted, 
repeated drought has forced massive foreign grain puchases — but 
neither do the PRC's people find themselves subject to unrelieved 
famine. While food is rationed, the allotments of staples would appear 
ample by virtually any standard: peasants, intellectuals and cadres 
receive some 30 pounds and workers 40 pounds per month. 33 

It is in the area of "sideline production'' of nonstaples, such as meat, 
fish, eggs, vegetables, sugar and cooking oils where rationing — and 
underproduction — hits hardest. These are the areas where the peas- 
ants' private plots are expected to take up the slack. Private plots, 
while representing a threat to the traditional Maoist philosophy, are 
an important factor in peasant morale, since they can eat, or sell what 
they produce for profit. This contributes to the peasants' willingness 
to cooperate in the government's modernization plans. 



83 Article in Far Eastern Economic Review, Apr. 14, 1978. 



72 

To date, the administrators in Peking have addressed themselves 
primarily to the goal of mechanization, and it is not clear that the 
leadership (despite Premier Hua's expertise in rural administration) 
has outlined an overall plan in any detail. The obstacles are 
formidable : 

Ninety-six percent of China's population is crowded into only 36 
percent of the land; only 10 to 11 percent of the land is cultivated (100 
million hectares) and that percentage will decrease as the PRC experi- 
ences the "urban sprawl" common to all developing and developed 
nations. 34 

As the delegation was able to observe during several tours of the 
countryside in several regions, as well as during three daytime flights 
over vast distances, productive land in China is extensively culti- 
vated. Some 70 percent of the cultivatable land is double-cropped, 
and in the southern provinces, triple cropped. So an immediate ad- 
vantage of rapid mechanization would be increasing yield b} T reducing 
the time between planting and harvesting, as well as in ploughing, 
threshing and transplanting. 

MECHANIZATION 

At present, though, the PRC's level of mechanization is very low; 
only 10 percent of the farmland is ploughed b}^ tractors. As a result, 
whereas an American farmer feeds 100 urban dwellers, the labor of 5 
Chinese peasants is needed to feed just one urban resident. Onl} T one 
household in 400 in the PRC even owns a tractor, compared with 80 
percent of the agricultural households in Japan, for example. 

In January 1978, Vice Premier Yu Chiu-li announced a national 
goal of SO percent mechanization of all major agricultural operations 
by 1980. Since the quality of the PRC's existing agricultural machin- 
ery production has been criticized severely by the Chinese themselves, 
and since the 1980 goal seems optimistic even by the often rhetorical 
standards set by Peking, the field of agricultural mechanization would 
appear to be ripe for foreign exports and expertise. 

A month before the Delegation's visit to the PRC, a large U.S. agri- 
cultural machinery delegation toured China. PRC officials were sub- 
sequently quoted as predicting excellent sales prospects, and rapidly 
concluded contracts. While experts feel that the PRC will follow its 
traditional pattern of purchasing prototypes to copy in its own facto- 
ries, one American firm, John Deere, Inc., has made more than$l mil- 
bo sales lo China in recent months. 

Even assuming that mechanization can proceed close to plan, how- 
ever, success in the rural sector will depend as well on other, major, 
i'.e tors. 

For example, the present field pattern is geared to the traditional, 
massive, individual effort by groups of peasants working by hand. 
Consequently, crops with very different planting and maturation 
periods ace grown side by side. Mechanization on a large scale will 
mean that the very physical pattern of Chinese agriculture will have 
to be changed entire held structures will have to he realined so 
crops can he planted for simultaneous harvesting. 

Even if the mechanical and structural problems are overcome 
and 1 he fields realined (with the massive social problems entailed 

M Oct. 8. 1'.j7>s article in I'm- Eastern Economic Review by John Carroll. 



73 

in persuading the peasants to risk changing the patterns of 1,000 
years), farm mechanization will also hinge on other measures which 

have traditionally plagued PRC planners: irrigation, seed develop- 
ment, rural electrification, capital construction, pesl control, and the 
all-important area of fertilizer development, production, and appli- 
cation. 

The PRC is presently the world's largest importer of nitrogenous 
fertilizers, 70 percent coming from Japan. 35 The PRC's traditional 
and highly organized system of locally produced fertilizer is well 
known, but the rate of application of more efficient chemical fertilizer 
is still very low — only 68 kilograms per hectare, compared with Japan's 
rate of 400 kilograms per hectare. 

The final area which must be integrated into the PRC's ambitious 
agricultural mechanization plan is management of the individual 
peasants themselves in work teams, production brigades, and com- 
munes (in that order; the commune falls within the county, the county 
within the province, and the province within the region). 

RURAL WAGES 

The complex and highly stratified system of paying urban workers, 
administrators, and technical personnel has been described. The 
peasantry are compensated for their labor under an entirely different 
system based on what the Chinese call "work points," but what in 
economic terms is usually called "piecework," and in earlier times 
could be compared with "sharecropping." The sj'stem has been 
described by an expert: 

The Government advances maintenances monthly to the peasants and 
settles the accounts with the peasants at the end of every year. The yearly yield 
of a production brigade is divided into two parts. One part is "public grain" 
and belongs to the State. The other part constitutes the total income of the 
brigade, but it has to be sold to the Government at a price set by the Government. 
One part of the total income of a brigade is the collective reserve funds of the 
brigade. Generally speaking, this part is used to buy farm machinery, chemical 
fertilizers, insecticides, etc., for the brigade, and to support the administrative 
service and welfare of the brigade. The other part is shared by the peasants 
of the brigade. The result of dividing the total number of the work-points obtained 
by the peasants of the brigade into the value of this part of the yield is the value 
of every work-point. The product of the value of one work-point and the total 
number of work-points which a peasant obtains a year is the practical income of 
the peasant. The Government pajs the peasants in both grain, which is rationed, 
and monej^. 

If the result of the settlement at the end of a year is negative, which may 
occur in some places where the land is too arid or sometimes when the weather is 
bad, the peasants are in theory in debt. But in most cases they need not pay 
back their debt to the Government. In other words, the income of a peasant is 
decided by two factors: the value of one work-point which is based on the harvest, 
and the number of his work-points which is decided by his work. Because of this 
the peasants are quite concerned about the harvest and will wprk hard to get a 
bumper harvest, though neither the land nor the yield belong to them. From 
the viewpoint of the economy a production brigade ma}- be looked upon as a 
corporation. In this corporation every peasant in the brigade is a director of the 
board, and his work-points represent his stock. The Government is, in fact, no 
more than a tax-gatherer, though in theory the boss. So the Chinese leaders 
can have faith in the morale of the peasants. 36 

While the obstacles to success discussed in this section on rural and 
urban workers are obvious and formidible, the sheer magnitude of the 
undertaking would appear on balance, to be a positive factor, rather 



35 Oct. 6. 1978 article in the Far Eastern Economic Review. 

88 Apr. 14, 1978 article by Ma Chu in Far Eastern Economic Review. 

35-200—78 6 



74 

than a negative one. For as mechanization increases, thus freeing 
hands presently needed just to keep the food supply roughly even with 
population growth, those rural hands can be organized to construct 
and work in the massive transportation, irrigation, fertilizer, and 
production facilities needed to boost further mechanization. 

China Sixce the Cultural Revolution 

The following section was prepared at the subcommittee's request 
by Dr. Robert Sutter, Analyst in Far Eastern Affairs, Congressional 
Research Service, Library of Congress. 

INTRODUCTION 

The leaders currently governing the People's Republic of China have 
been strongly influenced by the tumultuous domestic and foreign 
policy developments China has experienced since the start of the 
Cultural Revolution in 1966. Many of these leaders rose to high-level 
positions, while others were demoted, purged and rehabilitated, 
during this period. All of them have had to grapple with serious 
domestic problems and complex international pressures which have 
confronted China over the past decade. 

This survey provides an overview of the domestic and foreign 
policy developments of major importance to Chinese leaders since the 
start of the Cultural Revolution. It shows that Chinese leaders in 
recent years have been striving for internal political stability and 
material progress following the turmoil and ideological excesses of the 
Cultural Revolution. Their efforts have met with only partial success, 
as the Chinese today still confront major problems in their drive to 
unify their party and government apparatus, revitalize and modernize 
their economy and national defense, and strengthen their educational, 
rch, and cultural institutions. Peking's successes in foreign 
affairs have been more pronounced, as China has emerged from its 
diplomatic isolation during the Cultural Revolution to pursu ) b 
flexible and pragmatic foreign policy which has enhanced PRC 
international contacts and placed China among the major actors in 
Asian and world affairs. 

DOMESTIC DEVELOPMENTS 

£< i ior Vice Premier TeDg Hsiao-ping and ether prcminent Chinese 
ers have repeatedly stressed during conversations with Western 
vis lets over the past year that China faces serious problems in its 
efforts to modernize the economy, education system, and military 
structure, to make PRC political and social organizations more eli*- 
cient, and to improve Peking's standing in world affairs. Teng and 
other leaders have claimed that Peking's current difficulties stem in 
e measure from the disputive policies and actions over the p.- st 
decade of the so-called "Gang of Four"- a group of leftist Chinese 
Politburo Members who rose to prominence during the ( Cultural Revo- 
lution and retained considerable influence in Chinese ruling councils 
until they were arrested in October 1976. Western observers have 
tended lo discount this personalized explanation for China's trouble 



75 

as too simple, but they have generally agreed with the view that China 
has indeed gone through a trying period since the Cultural Revolution 
and is still suffering from some of the negative aftereffects of that 

experience. 37 

IMPACT OF THE CULTURAL REVOLUTION, L966-69 

During the early years of the Cultural Revolution, Mao Tse-tung 
and other Chinese leaders organized millions of Chinese youth into 
Red Guard contingents, which they used to disrupt and ultimately 
destroy the existing Chinese Communist Party (CCP) and govern- 
ment administrations. Some Ra\ Guard attacks on party and govern- 
ment bureaucrats led to armed clashes between the youths and estab- 
lishment forces. Schools were closed for several years to allow the 
youths to participate in the Red Guard movements. Scientific and 
cultural activities also were curtailed or halted. 

Most rural areas were not directly affected by the disorder, bi 
Chinese cities were seriously disrupted. Normal government actW 
came to a halt in some places and production in many urban enter- 
prises declined. Without an effective party or government organiza- 
tion, Chinese leaders were forced to call in the People's Liberation 
Army (PLA) to maintain law and order and to assure that production 
would not decline further. 

Opinions vary as to why Mao and his allies undertook such an 
ultimately disruptive reformation of the Chinese party and govern- 
ment. For one thing, Mao reportedly judged that leaders then in power 
in the party and government were fostering political, social, and eco- 
nomic programs that emphasized hierarchic organizations and material 
incentives. He judged that these leaders were following a path similar 
to the one followed by the "revisionist" post-Stalin leaders in the 
Soviet Union, and he thought that radical steps were needed in order 
to maintain progress in China toward the Maoist goal of an egalitarian 
and ideologically motivated society. 

At the same time, numerous Chinese leaders reportedly used the 
opportunity of the Cultural Revolution to advance their careers and 
to attain higher office at the expense of the thousands of veteran 
cadre who were purged during this period. Prime examples of these 
newly rising leaders were Mao's wife, Chiang Ching, and other leftist 
leaders who came to be known later as "the gang of four." Many 
other Chinese leaders who still hold power in Peking — including the 
present CCP Chairman Hua Kuo-feng — also rose to power in large 
part because of their ability to advance during the political turmoil 
of the Cultural Revolution. 

PLA forces stationed throughout the Chinese provinces began strong 
efforts to suppress Red Guard activists and to restore order in 1968. 
Western analysts have offered differing explanations as to why Chinese 
leaders, who launched the Red Guard movements 2 years earlier, 
now were willing to go along with the suppression of the activists 
and a return to more normal administrative practices. They frequently 
have stressed that the vast majority of Chinese leaders seemed pre- 
occupied with the host of problems China faced at this time including 



" 7 Somp recent Western analyses of Chinese domestic affairs since the Cultural Revolution 
include Parris Chang, "Power and Policy in China" ; Byung-Joon Aim, "Chinese Politics and 
the Cultural Revolution" : Jurgen Domes, "China After the Cultural Revolution" ; aud 
Maurice Meisner, "Mao's China." 



the need to restore order, rebuild the party and government adminis- 
trations, promote urban and rural production, revitalize national 
defense, and reopen schools, universities, and scientific, cultural and 
research establishments. Peking's success in solving these problems 
over the next few years was limited, however, in part because of the 
massive size of China's problems and the limited resources available 
there, but also because of continuing sharp leadership conflicts. 

THE LIX PIAO AFFAIR, 1969-71 

As order was slowly restored in Chinese cities, and party and govern- 
ment administration was gradually rebuilt during 1968 and 1969, it 
became apparent that a group of Chinese military leaders headed by 
Defense Minister Lin Piao were exerting unusually strong influence 
in Chinese ruling councils. In particular, military leaders, who were 
providing local law and order in the Chinese provinces, gradually 
assumed important positions in the rebuilt party and government 
organs there. Based on their local power, their traditionally important 
positions in the Chinese central government in Peking, and the ap- 
parent active support they received from some leftist Chinese political 
leaders like Chiang Ching, PLA officers loyal to Lin Piao attained 
verv strong political positions at the time of the 9th CCP Congress in 
April 1969^ 

Their positions were not unchallenged, however. Over the next 2 
years, Chines officials led by Chou En-lai and backed by such veteran 
military and civilian cadre as Teh Chien-ying and Li Hsien-nien 
worked to reduce the military's dominance m Chinese politics. Dis- 
putes between the group around Lin and the officials allied with Chou 
tended to impede proirre-s toward a resolution of China's serious 
domestic problems. Thus, for example, the two sides differed on such 
sensitive issues as: 

(a) Rehabilitation of veteran cadre who had been discredited during 
the Cultural Revolution. — Chou generally favored the rehabilitation 
of these Leaders, reportedly in the hope of using their talents to get 
( 'hina's administration and economy moving again and also to employ 
their abilities to counter the influence of Lin Piao's group, whereas 
Lin and his allies reportedly preferred the status quo; 

(b) PLA influence in Chinese party and government affair*. — Chou's 
group generally favored more separation of the military from civilian 
political duties, whereas Lin and his colleagues supported the main- 
tenance of the PFA's strong position in the party and government; 

Military spending. — Chou's group reportedly favored a cutback 
in military spending, hoping to focus China's scarce resources on 
economic development, whereas Lin's followers favored continued high 
military -pending, both for large armies and the acquisition of modern 
weapons; 

Foreign affairs.— -Chou favored a differentiated posture toward 
the two superpowers, hoping to use improved relations with the Unit *d 
States in order to offset growing Soviet pressure on ( Jhina ; Lin, on the 
other band, favored a continuation of strong Chinese opposition to 
hot h superpower 
Over the next 2 yea] . ( bou and his allies managed to use 



77 

successes they engineered in Chinese foreign policy and in their 
programs for revitalizing the Chinese administration and economy to 

challenge and ultimately to destroy the power of Lin Piao. Lin died, 
reportedly in a plane crash, in September L971. Subsequently, the 

power of PLA leaders in party and government affairs in China was 
reduced; military spending was cut back; and the civilian leadership — 

bolstered by the rehabilitation of such veteran cadre as Teng Ilsiao- 
ping — was able to reassert its traditional dominance of Chinese 
military affairs. The highlight of this effort came in late L973, when the 
Chinese party completed a transfer of all the major military leaders 
who had become entrenched in power in particular regions in China 
during the Cultural Revolution. 

REFORMS UNDER CHOU EX-LAI, 1971-74 

Following- their success against Lin Piao, Chou and his colleagues 
began programs designed to reduce China's Maoist ideological pre- 
occupations during the Cultural Revolution and to advance Chinese 
economic development and the material quality of life of the Chinese 
people. They turned away from the ideological campaigns begun in the 
Cultural Revolution which has diverted attention from more practical 
problems of economic development. They attempted to revive the 
use of certain kinds of material incentives in order to encourage workers 
to work harder — practices which had been strongly criticized by 
activists during the Cultural Revolution who judged that Maoist 
ideological incentives would suffice to motivate workers to work hard. 
They reopened universities and other institutes of higher learning and 
research, reduced the amount of time teachers and students spend on 
ideological studies, and revived standards which emphasized the 
importance of academic achievement and downplayed ideological 
criteria which had been prevalent during the Cultural Revolution. 

These leaders supported programs which sent youth from the cities 
to the countryside to work with peasants. Such programs served to 
decimate the ranks of the increasingly moribund Red Guard organiza- 
tions and to effectively reduce the likelihood of a repeat of the dis- 
ruptive events of the late 1960's. At the same time, order and dis- 
cipline were emphasized in urban factories, and managers were given 
more disciplinary power over their subordinates — a change from the 
practice during the Cultural Revolution when workers commonly 
halted production in order to organize impromptu "struggle" 
meetings designed to discredit managers in the eyes of the workers. 

Chou's group also tried to revitalize China's economy by purchasing 
foreign technology — including whole plants — and it attempted to gain 
foreign exchange to pay for this technology by increasing Chinese 
exports. This policy was in apparent opposition to the ideological 
stress on self-reliance voiced by Chinese leaders during the Cultural 
Revolution. At the same time, Chou's group tried to broaden China's 
cultural life beyond the few selected "model works" fostered during the 
Cultural Revolution, and it advocated greater cultural interchange 
with foreign countries, including the ''bourgeois" nations of the West. 
To manage all the^e changes — and presumably to strengthen their 
own leadership position — Chou and his supporters advocated a re- 
habilitation of hundreds of high-level Chinese leaders who had been 
discredited during the Cultural Revolution. 



CHALLENGES FROM THE "GANG OF FOUR," 1974-76 

Some political leaders, whose careers had benefited from the Cul- 
tural Revolution and who had become closely identified with the 
ideological policies of that time, saw the return to pragmatism and the 
rehabilitation of veteran cadre as a threat to their leadership positions. 
These leftists — headed by the four Chinese Politburo Members now 
know as the "Gang of Four" — resisted the new policies of Chou En-lai's 
group in several ways. Their influence was felt in particular during 
massive political campaigns which spread throughout China in 1974 
and again in 1976. 

The campaign in 1974 focused ostensibly on criticizing the historical 
policies of Confucius, but in fact it was used by the leftists to attack 
the current policies of Chou En-lai and his group. Employing their 
control of some PRC propaganda media, the leftists made repeated 
allusions which compared Chou's policies with those of Confucius and 
denounced his programs stressing academic performance in education, 
material incentives, increased foreign trade and cultural exchanges, 
more social discipline and order, and the rehabilitation of veteran 
cadre. 

Leftist attacks slowed the revitalization of China's material develop- 
ment, although Chou was able to win national support for his programs 
and to reassert China's primary goal of becoming a "modern Socialist 
nation" by the end of the century, during the National People's 
Congress of January 1975. But Chou's health worsened that }'ear and 
his death in January 1976 prompted a revival of leftist efforts to curb 
pragmatic policies. The "Gang of Four" launched a major political 
campaign which succeeded in bringing down Chou's chief lieutenant, 
Teng Hsiao-ping, and in seriously complicating plans at that time to 
streamline and modernize the armed forces, increase foreign trade, 
promote academic excellence, and rehabilitate veteran cadre. 

The death of Mao in September 1976 resulted in an apparently 
serious weakening of the political power of the "Gang of Four." 
During the ensuing struggle for power, the "gang" members and some 
of their followers were toppled from power by a diverse coalition of 
( 'hinese leaders, including some veteran military and civilian followers 
of Chou En-lai — like Yen Chien-ying and Li Hsien-nien — and some 
younger leaders who had risen to power since the Cultural Revolu- 
tion — like Hua Kuo-feng. 

RECENT DEVELOPMENTS 

Over the pas! 2 years, the PKC leaders have taken several major 
steps forward in meeting China's developmental needs — they have 
established the outlines of an economic plan for China's economic 
development up to 1985, begun efforts to increase capital investment 
apiculture, light industry, and heavy industry, authorized wage 
increases for low paid workers, launched reforms in education and 
research designed to improve China's level of technical competence, 
restored discipline and fixed rules and procedures within ( Chinese party 
and government organs and in major economic enterprises, and begun 
a program to streamline and modernize Chinese fighting forces. 

Most Western observers agree that China's prospects for successful 
development have been enhanced following the purges of Lin Piao and 



the "Gang of Four," but many add that numerous problems continue 
to vex the PRO leadership and to complicate China's search lorn 
rial progress. Indeed, the current Chinese leaders seem to remain far 
from unified over how China should proceed. Thus, for example, there 
is continuing division and antagonism between sonic officials who were 
criticized during the Cultural Revolution and subsequently rehabili- 
tated, and some whose careers benefited from close association with the 
Cultural Revolution, Lin Pino, and or the "Gang of Four." There is also 
strong disagreement between leaders who favor a continuing emphasis 
on Maoist ideology, along with programs for material progress, and 
those who judge that Maoist ideology is largely an impediment to 
greater material progress. Perhaps of more importance, Ohm;! t< 
remains a poor and still backward country with a massive populi 
and only limited resources to spare in the drive for material prog 
The PRO leaders are almost certain to have strong disagreements < 
they decide which of China's major competing needs — such as 
cultural mechanization, light industry, and consumer products, steel 
production and transportation modernization, and military moderniza- 
tion — will receive priority for future development. 

FOREIGN RELATIONS 

The checkered development of Chinese domestic policy over the 
past decade has been mirrored to some extent by Peking's approach 
to foreign affairs during the period. The general trend in Ch 
foreign policy has been to move away from the isolation and ideolo 
self-righteousness which characterized Peking's posture during the 
Cultural Revolution to a more pragmatic, conventional diplomatic 
approach designed to strengthen and protect China's vital interest- in 
Asian and world affairs. China's progress in foreign affairs has been 
greater than its accomplishments in domestic policies, with a par- 
ticularly crucial development being the Sino-American reconciliation 
begun during President Nixon's February 1972 visit to China — the 
most important breakthrough in modern Chinese foreign policy. How- 
ever, progress toward pragmatism in foreign affairs has been periodi- 
cally slowed and halted over the past decade by the same kind of 
leadership disagreements and conflicting interests which have plagued 
Chinese domestic affairs. 38 

ISOLATION DURING THE CULTURAL REVOLUTION 

In the mid 1960's, Chinese foreign policy was marked by acute 
isolation, stemming in large part from the negative impact of the 
Cultural Revolution on the conduct of Peking's foreign policy. 

Provocative Chinese diplomatic behavior, particularly in 1967 and 
1968, severely weakened China's international stature and isolate 
from many of an already limited number of foreign friends. Toward 
many neighboring states in Asia, for example, Peking adopted an 
attitude of self-righteous hostilitv and disdain, and tberebv severely 
alienated several previously friendly states including Cambodia, 



s 8 Some recent Western analyses of Chinese foreicm policy since the Cultural Revolution 
include A. Doak Barnett. China and the Major Towers in East Asia ; Harold Hinton, Three 
and a Half Powers: The New Balance in Asia : John Gittinc-s. The World and China, and 
Robert Sutter, China-Watch : Toward Sino-American Reconciliation. 



80 

Nepal, Ceylon, and Burma. Even Peking's Communist neighbors, 
North Korea and North Vietnam, were cool toward the PRC, while 
continued intense Chinese hostility toward both the United States 
and the Soviet Union insured a persisting freeze in PRC relations with 
the two superpowers. Prospects for an improvement in Chinese foreign 
relations at this time appeared limited, inasmuch as Chinese leaders 
showed little interest in foreign developments or even in the restarting 
of the Chinese foreign ministry apparatus which had been decimated 
by Red Guard attacks during the Cultural Revolution. 

ORIGINS OF A NEW APPROACH TO FOREIGN AFFAIRS 

The August 1968 Soviet incursion into Czechoslovakia and Moscow's 
concurrent formulation of the so-called Brezhnev doctrine of limited 
sovereignty demonstrated to the Chinese that Moscow might be pre- 
pared to use its overwhelming military superiority in order to pressure, 
and even to invade, the PRC. The Sino-Soviet border clashes of 1969 
increased Peking's concern over the Soviet threat. In response, Chou 
En-lai and his supporters made a major effort in 1969 to broaden 
Peking's leverage against the Soviet Union by ending China's inter- 
national isolation. In this pursuit they utilized conventional diplomacy 
and softpedaled the ideological shrillness characteristic of Chinese 
foreign policy during the Cultural Revolution. 

Because of Moscow's massive power, Peking realized that improving 
diplomatic relations with most countries would be of relatively minor 
significance in helping China with its pressing need to offset the 
Q.S.S.R. In East Asia, only the other superpower, the United States, 
seemed to have sufficient strength to serve as an effective deterrent 
to Soviet pressure. Moscow in the past had shown uneasiness over 
signs of possible reconciliation between China and the United States. 
Thus, the Chinese leaders were aware that they held an important 
option: They could move closer to the United States in order to 
readjust Sino-Soviet relations and form a new balance of power in 
East Asia favorable t6 Chinese interests. 

While the Chinese faced increasingly heavy Soviet pressure in 1969, 
the newly installed Nixon administration was beginning policy 
initiatives designed to pull back American military forces from Asia 
and to reduce U.S. commitments along the periphery of China. It 
was soon apparent that the so-called Nixon doctrine of gradual troop 
withdrawal was perceived favorably by Peking. The Chinese leaders 
saw the American pullback as solid evidence of the Nixon admin- 
istration's avowed interest in improved relations with China. They 
also viewed it as a major opportunity for China to free itself from the 
burdensome task of maintaining an extensive defense network along 
i- southern and eastern borders against possible U.S. -backed 
ed incursions. Peking now saw greater opportunity for China to 
spread its own influence in neighboring East Asia as the United 
States gradually retreated. Primarily on the basis of these two fac- 
aeed to use Sino-American rapproachement to offset Soviet 
pressure on ( Jhina and a desire to take advantage of prospects opening 
lor the PK( r under terms of the Nixon doctrine in Asia — Peking 

agreed to receive President Nixon and to begin the process of nor- 
zing Sino-American relations. 



81 

LEADERSHIP DIFFERENCES OVER FOREIGN POLICY 

The logic of this new pragmat ic approach — which was to provide the 
foundation of Chinese foreign policy in the L970's was not unive] 
accepted by Chinese leaders. Lin riao and some of bis military allies 
reportedly resisted Chou En-lai's initiatives in foreign affairs, in part 
because the successful implementation of (lion's program would raise 
the political stature of Chou and his supporters at the expense of Lin 
and his group, and would also reduce the need for large-scale military 
spending as the primary means to guarantee China's security. Lin's 
group was joined for a time by leftist political leaders such as Chiang 
Ching, who favored a stringent ideological posture in foreign affairs 
and opposed in particular Peking's new flexibility toward its fo.> 
main adversary, "'U.S. imperialism." 

The effectiveness of Chou's program in offsetting the Soviet tin-eat 
to China and in broadening Chinese international appeal served to 
neutralize much of the opposition within the Chinese leadership. By 
the early 1970's, Peking had rapidly expanded diplomatic contacts 
and improved relations with many nations. The Chinese advance 
was highlighted by Peking's entrance into the United Nations in 
October 1971, President Nixon's visit to China in February 1972, 
and the normalization of Sino-Japanese relations during Prime 
Minister Tanaka's trip to China in September 1972. 

Lin Piao and his allies were removed in late 1971, but the leftist 
Chinese politicians headed by the "Gang of Four" occasionally rose to 
resist and reverse pragmatic programs in foreign affairs in general and 
in Sino- American relations in particular. Most notably, as part of 
their attack on Chou's policies during the anti-Confucius campaign 
in 1974, the leftists harshly criticized — on ideological grounds — the 
allegedly corrupting influence on Chinese society of foreign music, 
films, and other cultural works. This served to curb what had been an 
active Chinese interest in developing cultural exchange with foreign 
countries, including the United States. They criticized Chinese trade 
with capitalist countries, with propaganda claiming that such trade 
would break the Maoist precept on Chinese economic self-reliance 
and would make China dependent on "imperialism" — a line which 
acted to dampen Peking's interest in increasing trade with the West. 

The anti-Confucius campaign also led to an intensification of Sino- 
Soviet hostility. Not only did Peking media greatly expand harsh 
ideological polemics against the Soviet Union, but the Chinese — for 
the first time since the Sino-Soviet border clashes of 1969 — publicized 
the arrests of alleged Soviet "spies" in the PRC. Peking gave exten- 
sive publicity to the arrest in January 1974 of Soviet diplomats in the 
Chinese capital and the arrest in March of that year of a Soviet 
helicopter crew which had landed in Sinkiang near the Sino-Soviet 
border. The diplomats were promptly expelled from China, leading to 
a quick close to that incident. But Peking decided to detain the Soviet 
helicopter and its crew, resulting in an exchange of sharply worded 
Sino-Soviet protests which marked a downturn in the already poor 
Sino-Soviet relationship. 

Chinese relations with the United States fell prey to the anti- 
Confucius campaign in various ways. Peking was obviously less inter- 
ested in cultural exchange and trade with the United States. Polemical 



82 

Chinese media criticism of U.S. "oppression" at home and "imperial- 
ism" abroad also increased sharply. Peking at the same time adopted 
an unusually strong, militant stand on the sensitive Taiwan issue, 
going so far as to warn in shrill language that China was prepared to 
launch a military strike across the Taiwan Straits. 

RECEXT CONCERNS 

A similar ideological hardening in Chinese foreign policy took place 
when the leftists briefly gained power in Peking in mid 1976, but since 
the removal of the "Gang of Four'' late that year, Chinese officials 
have been preoccupied largely with pragmatic efforts to protect 
China's security interests in world affairs, especially against perceived 
threats from the Soviet Union. Peking has worked to offset suspected 
Soviet "expansion" in Asian and world affairs by fostering an "anti- 
hegemony united front" led by China and other developing Third 
World countries and including developed "Western countries — even the 
United States, whose interests are directly threatened by Soviet 
"hecremonism." 

-\- was (1'scussed in detail in a previous section of this report, Chinese 
leaders have shown special concern in recent years over U.S. ability 
and willingness to work with China in offsetting what Peking sees as 

jcow's growing ambition for world domination. Peking has noted 
that the United States has tended to "apnease" rather than resist the 
; LS.S.R. over such sensitive issues as SALT, disarmament in Europe, 
East-West trade, and Soviet policy in Africa. 

A perceived decline in U.S. strength, coupled with a growth in 
Soviet power, has also intensified longstanding Chinese fears of Soviet 
efforts to "encircle" China in Asia. Most recently, PRC leaders, 
♦■specially Vice Premier Teng Hsiao-Ping, have claimed to see Moscow 
heavily involved in Vietnam's alleged efforts to dominate Indochina, 
and they have accused the Soviets of having established military bases 
in Vietnam for the purpose of "encircling" China and of controlling 

anes important to the United States, Japan, and China. 
Other difficulties in current Chinese foreign policy focus on conflict- 

.oals in China's foreign plans and Peking's limited military and 
economic power. Thus, for example, Peking on the one hand str< 
that it wants the United States to remain strong against the Soviet 
[J] m in East Asia, and yet on the other hand it continues to vocally 
support North Korea's demands for a complete American military 
withdrawal Prom the strategic Korean Peninsula. China exerts great 
efforts to reassure its non-Communist neighbors, who have long been 
suspicious of Chinese intentions, but it also continues to support 
Maoist parties which lead aimed insurrections against some ol* those 
governments, supports the rights of Overseas Chinese in these areas, 
and reasserts territorial claims which infringe on the holdings of some 
<i' tin se na1 olicies which clearly upset the non-Communist 

ttes. China's current program for military modernization also 
-•'"ins likely to alarm neighboring Asian stntes, who fear a major 

nsion in Peking's heretofore limited ability to reach militarily 

nd its borders. 

In Africa and the Middle East, China's problems have focused on 
it- inability to match me ot iet shipments of military and other 



83 

aid to the area — a development which 1ms made Peking all the more 
vocal in urging the United Mates and other Western countri 
actively compete with Moscow in these regions. China has also been 
trying to persuade Western European nations and Japan to reduce 
their trade with the U.S.S.IL, and has held out in tnis regard the 
"China market" as a possible alternative to thai of the D.S.S.K. With 
the exception of Japan, however, Peking has thus far avoid< d signing 
trade contracts with these countries which could even come clos 
compensating them for reductions in their trade with Moscow. 



APPENDIX A 



China Itinerary 

July 3, 1978— Shanghai 

06:40 a.m.: Arrival at Shanghai International Airport. Met by Mr. Li Chu-wen, 
Deputy Director, Foreign Affairs Bureau, Shanghai Municipal 
Revolutionary Committee. 

20:00 p.m.: Banquet hosted by Deputy Director Li, accompanied by staff of 
Foreign Affairs Bureau. 

July 4, 1978— Shanghai 

Visit to Shanghai General Petrochemical Complex, in suburl an 
Chin Shan, on Hangchow Bay. Host: Kung Chao-juan, director. 

Visits to: Kindergarten, No. 1 acrylic plant, workers housing 
area, hospital. 

July 5, 1978— Shanghai 

08:30 a.m.: Visits to the Yu Gardens. Host: Shih Chuang, leading member, 

Revolutionary Committee of the Gardens. 
14:30 p.m.: Shanghai Dance Institute. Host: Sun Kun, president. 

— Dance exercises . 

— Scene from the play, "The Dying Tree Comes to Life." 
19:00 p.m.: Performance of Shanghai Philharmonic Orchestra. 

July 6, 1978— Shanghai to Peking 

08:30 a.m.: A. Visit to "July 1" Commune, suburb or Shanghai. Host: Ms. Rui, 

Director of General Affairs. 
B. Visit to Shanghai Arts and Handicrafts Research Institute. Host: 

Wang Tzu-kan. 
13:20 p.m.: Departure for Peking — Civil Aviation Authority of China (CAAC). 
16:00 p.m.: Visit to Pei Hai Park. 

July 7, 1978— Peking 

09:00 a.m.: Meeting with Mr. Wang Jun-sheng, Vice Minister of Foreign Trade. 

14:00 p.m.: Visit to the Forbidden City (Palace Museum). 

16:00 p.m.: Meeting with Ambassador Hao Teh-ching, President of the People's 

Institute of Foreign Affairs. 
19:00 p.m.: Banquet hosted by Ambassador Hao and staff, including Chu Chi- 

chen, Deputy Director of American and Oceanic Affairs. 

July 8, 1978— Peking 

07:30 a.m.: Breakfast briefing at U.S. Liaison Office, Ambassador's residence. 

Ambassador and Mrs. Woodcock and staff: Bill Thomas, Economic 

Counselor, Stapleton Roy, DCM, and Richard Bock, Counselor. 
09:30 a.m.: Meeting with Dr. Chiu Pei-yuan, vice president of the Academy of 

Sciences, current president of Peking University, acting president 

of Science and Technology Association. 
11:00 a.m.: Visit to underground shelter. Host: Mr. Kao, Chairman of the Air 

Defense Works of Tah Sha Lan St. 
14:00 p.m.: Visit to Peking University. Host Dr. Chang Lung-hsiang, professor 

of biochemistry. 
19:00 p.m.: Cultural performance, Nationalities Palace of Culture. 

(85) 



86 

July 9, 1978— Peking 

08:15 a.m.: Visit to Memorial Hall of Chairman Mao, Tienamin Square. 
10:00 a.m.: Meeting with Senior Vice Premier Teng Hsiao-ping (Great Hall of 
the People). 

— Ambassador Hao Teh-ching. 

— Mr. Wang Hai-jung, Vice Minister, Foreign Affairs. 

— Mr. Hsieh Li. 

—Mr. Chu Chi-chen. 

— Mr. Fan Kuo-hsiang, Deputy Division Chief. 
13:00 p.m.: Visit t (heat Wall. 

19:00 p.m.: Delegation banquet for Chinese hosts. Guests include: Ambassador 
and Mrs. Woodcock, Ambassador Hao Teh- ching ami staff. 

July 10, 1978— Peking to Sian 

13:10 p.m.: Departure for Sian via CAAC flight. 

17:00 p.m.: Visit to Wild Goose Pagoda (Ming dynasty). 

19:00 p.m.: Banquest. Host: Mr. Chang-tse, vice chairman, Revolutionary 
Commit! ee, Shensi Province, Mr. Lu Mai, Director, Foreign Affairs 
Bureau, and Mr. An Wei, Foreign Affairs Bureau. 

July 11, 1978— Sian 

08:30 a.m.: Visit to Chiao Tung University (Communications). Host: Mr. Chuang 

Li-ting, vice president of the university. 
1"):00 p.m.: Visit temple baths and archoological site. 

July 12, 1978— Sian to Canton 

08:30 a.m.: Depart for airport, CAAC. 

09:00 a.m.: Flight to Canton (1 stop) — lunch at Chairman Mao's birthplace. 
14:30 p.m.: Arrive Cam on. 

16:00 p.m.: Tour of Canton waterfront and financial district. 
19:00 p.m.: Welcoming banquet. Host: Mr. Chu iShao-tien, Vice Chairman for 
Foreign Affairs, Canton Province. 

July 13, 1978— Canton to Hong Kong 

08:30 a.m.: Train to Hong Kong border. 

11 :00 a.m.: Cross Hong Kong border, Sum Chun Railroad Station. Met by: 

Consul General Sh< esmith and staff. 
12:07 p.m.: Arrive Hong Kong, Kowloon Station. 

July 14, 1978— Hong Kong 

08:30 a.m.: Debriefing at U.S. consulate by Consul General Shoesmith, D.C.G. 

Burton Levin and staff. 
13 :00 p.m. : Working luncheon at Government House. Host: Acting Governor 

Sir Denys Roberts. 

July 15, 1978— Hong Kong to Washington, D.C. 

Breakfast with U.S. Chamber of Commerce,' Hong Kong. Host : 

Mr. Michael Emmons, president (in absentia). 
!'• i - confi rence. 
Leave hotel for Kai-Tak Airport. 
\\ iiceis up for Washington Andrews Aii Force Base. 
Arrival at Andrews Air Force Base. 



08:30 


a.m. 


10 


30 


a.m. 


12 


1)0 


n. : 


L3 


DO 


p.m. 


21 


30 


p.m. 



APPENDIX B 



Delegation Press Conference in Hong Kong 
July 15, 197S 

Mr. Phillips [Consul General's staff] Ladies and gentlemen, Welcome. I 
apologise for cramming you in such a small room but, unfortunately, it's the only 
one we could get. It's my pleasure this morning to introduce to you the Consul 
General, Mr. Thomas Shoesmith. 

Mr. Shoesmith [U.S. Consul Generall I'm sure that the Honorable Lester 
Wolff needs no introduction to you all. He is a very familiar figure in this part 
of the world — both as a businessman and as a member of our Congress — and 
most particularly as Chairman of the Asian and Pacific Affairs Subcommittee 
of the House Committee on International Relations. In that capacity he and the 
other members of his Committee are playing an increasingly important role in 
the formulation of our foreign policy, most particularly in respect to Asia. Con- 
gressman Lester Wolff is also, as you know, the Chairman of the House Seled 
Committee on Narcotics Abuse and Control. It's a pleasure for me to introduce 
to you Congressman Lester Wolff, Mr. Chairman. 

Congressman Wolff. Thank you very much, Mr. Shoesmith. I should like to 
first introduce the members of this mission — on my extreme right, Mr. Larry 
Winn of Kansas; seated next to him is Congressman Eligio de la Garza of Texas; 
seated over on the extreme left is Mr. Tennyson Guyer of Ohio; and seated next 
to him, Mr. James Mann of South Carolina and next to him, Mr. Charles Rangel 
of New York. 

With the exception of Mr. Mann, all of us were on the recent mission to the 
People's Republic of China. We've just returned from 10 days in the PRC. The 
mission was most fascinating and we hope helpful in furthering mutual under- 
standing on both sides. 

Mr. Fountain, who will be with us shortly, was also a member of this group 
as well as Mr. Burke. Mr. Fountain of North Carolina and Mr. Burke of Florida. 

All of the members of this group are members of the International Relations 
Committee, except Mr. Rangel, who is a member of the Ways and Means 
Committee. 

You know — certainly no visit of 10 days or 11 days qualifies any group as 
experts on the policies or events of another nation. Although our mission included 
two members — Mr. Burke and myself — who first visited China two years ago, 
which gave us an opportunity for comparison. I think we are all united in our 
determination not to come out of China issuing any earth-shaking pronouncements. 

However, I think we are equally united on a general sense of what our mission 
perceived to be certain trends in China which will bear close study in the weeks 
and months to come. 

I refer specifically to what we feel can be called a sense of a "new realism" in 
China — on the part of her people and on the part of their leadership — concerning 
both domestic and foreign policy questions facing China at the present time. 

While we discussed many issues with the Chinese, one area where we sensed a 
potentially important example of the new realism would appear to be on the 
question of Taiwan. 

Let me state here very clearly that we do not feel that the basic Chinese position 
on Taiwan has altered regarding their perception of the need for U.S. adherence 
to the Shanghai Communique and the Three Points. Rather, our delegation sensed 
a new realism in terms of an emerging Chinese emphasis on seeking ways to settle 
the Taiwan question on a bilateral basis, between the Chinese themselves, in ways 
that are acceptable to the parties involved. 

(87) 



88 

In this regard, the delegation sensed a growing Chinese willingness to discuss 
Taiwan's future with the Kuomintang on the basis of existing realities. 

In our discussions on this issue, the historical fact was raised that twice in the 
past the Chinese Communist Party and the Kuomintang have come together and 
cooperated when it was in their common interest — first, during the time of Dr. 
Sun Yat Sen and the Northern Expedition, and again, toward liberation during 
World War II. 

When coupled with the repeated instances of our delegation being told that the 
Chinese recognize what were termed the realities of the United States' involve- 
with Taiwan, our delegation emerged from the People's Republic with a 
definite sense of the sobering effects of the real, very real strategic and political 
problems facing China in the form of the Soviet Union, which they term the "Polar 
Bear", and what the Chinese as well call the Soviet Union's "Asian Cuba*' — 
Vietnam. 

Our general perception of China's "new reality'' was reinforced by our visits to 
educational facilities, cultural institutions and factories alike. At institutions 
ranging from Peking University to a provincial technical university in Shensi 
Province, we heard the same themes — that the damage done during the stagnation 
of the cultural revolution, and solidified by the extremes of the "Gang of Four'' 
have set China back years in scientific and technical education and research, and 
seriously retarded industrial production, modernization and growth. 

Again and again, we heard the Chinese rightfully discuss their strengths, but 
f lankly discuss their weaknesses, and indicate their desire for constructive sugges- 
tions from the West, particularly from the United States. 

Again and again, we saw evidence that the new realism is leading the Chinese to 
be receptive to American technology and American expertise to help them over- 
come the lost decade of the cultural revolution and the so-called "Gang of Four." 

This emerging realism is the most striking contrast between China today and 
that of two years ago, and is, we feel, a most favorable impulse- toward normaliza- 
tion of relations between our two governments. While the Chinese remain deter- 
mined to pursue self-reliance, they appear to be no longer adverse to making use 
of the best from other nations — a policy rooted in the Chinese tradition and which 
continued through the 1950's prior to the Sino-Soviet split. 

In tnis respect, it is the delegation's opinion that the Chinese see their rela- 
tionship with the United States as part of an overall strategic and political recog- 
nition of the realities, which they see as an increasing pattern of Soviet activity 
around the globe — from Angola to South Yemen, from Afghanistan to Ethiopia 
and Vietnam. This conflict with the Soviets is seen not as just part of an ideological 
battle with the Soviet Union but is perceived as an effort by the U.S.S.R. to 
dominate the entire world. 

Hence, the Chinese see an improved relationship with the United States as 
being in the common interest of both countries. 

< >'tr delegation sensed that the Chinese do not desire the United States to play 

the normalization issue as just another "card" against the Soviets. Indeed, the 

ese seemed to be going out of their way to stress the common strategic and 

. n policy interests that we share in confronting Soviet actions in the entire 

world arena. 

What we are calling a new sense of "realpolitik" was particularly present during 
our discussions on U.S. relations with the Soviet Union, and we saw very little of 
the "Id rhetoric, despite what was basically a continued and very hard line con- 
cerning the Soviets. 

A final comment in this regard: the Chinese continually warned us not to fall 
for what they termed a Soviet "bluff" on possible Sino-Soviet reconciliation, so 
seriously do they view the practical political and strategic long-term threat posed 
by the Soviets. 

This apparent decline in ideological emphasis is, as I have noted, reflected in 
Chinese domestic matters as well. Not only did we sense a very real revulsion 
t the practices of the so-called "Gang of Four", which climaxed a decade of 
an ideological blanket which threatened to smother China; I think we also per- 
ceived :i growing appreciation of the linkage between helping to maintain interna- 
tional peace, and the time China needs to grow internally. 

Xo longer did we hear that war between the United States and the Soviet 
Union is, and here I quote, "imminent" and "inevitable" :>s was the constanl 
theme Borne two years ago when I visited last. But this time we heard that if the 
United States maintains strong political and strategic posture in Asia, and Europe 



89 

and Africa as well, war is actually "postponable", perhaps for as much, they hope, 
as 25 years. 

While this may well fall into the good news/had d< ws category, the delegation 
sensed that there, too, a sense of realism regarding China's interests and needs 
for^the years ahead is beginning to emerge. 

With this growing pragmatism, the delegation sensed that while Chairman 
Mao is still the dominant figure, he is being studied anew — if not being re-inter- 
preted — for support for the new pragmatism. As I have indicated, our mission 
heard very little of the rhetoric which bo pervaded the visit 2 years ago. 

This time the only saying of Chairman Mao which was constantly repeated 
was Mao's injunction of "Let 100 flowers bloom, let 100 schools of thought 
contend." We were repeatedly told that this new rallying call is designed to 
permit constructive conflict of thought and ideas in order to stimulate the progress 
which the Chinese now frankly admit they must make. 

Our delegation feels that the implications of this theme for what we are calling 
China's "new realism" should — if allowed to flourish — affect all aspects of China's 
life and policy, and substitute a return to a discipline practised before the cultural 
revolution for the anarchy of the Red Guards of recent years. 

So to conclude this brief summary of our impressions, I would say that it is 
our sense that a flourishing growth — under this strict control of the party, of 
course — is precisely what the leaders of China hope for their people as this huge 
and great nation moves to take its place in the world. 

While in China, our delegation met with many officials, including Vice Premier 
Teng Hsiao-p'ing; Vice Foreign Minister. Wang Hai-jung; Mr. Wang Jun-sheng, 
A'ice Minister of Foreign Trade; Ambassador Hao Teh-ch'ing, President of the 
Chinese People's Institute of Foreign Affairs; Dr. Chou P'ei-yuan, Vice Presi- 
dent of the Academy of Science and President of Peking University; and many 
other individuals and provincial authorities who gave graciously of their hospi- 
tality, time and views. 

Thank you, gentlemen. And now we should like to invite questions — we don't 
claim to be China experts, we claim to be China students. 

Question. Mr. Congressman, you said that China is willing to negotiate anew 
with the KMT — have you got any substantial information on this? 

Mr. Wolff. The statement that we made was that China has twice before come 
together with the KMT and there is no reason to believe — they indicated — that 
they could not come together once again. 

Question. Mr. Congressman, did the Chinese raise — bring up — this history 
of their previous cooperation with the KMT or did you bring it up in your 
discussions? 

Mr. Wolff. They were the ones that introduced it. 

Question. Mr. Congressman, did they sav they were willing to talk to the 
KMT? 

Mr. Wolff. The only point that was made was that — the statement that I've 
made before — that they have had a previous history and they see no reason why 
this previous history could not be repeated. 

Question. Mr. Congressman, which official made that statement? 

Mr. Wolff. I would prefer not to identify the official, but to say that it is a 
very high ranking official at the People's Republic of China. 

Question. Have you got any indication that there's going to be negotiations 
between the two parties? 

Mr. Wolff. I have no indications of that at all. I will have to stand on the 
statement that I've just made — I do not want to draw any implications from that. 

Question. Mr. Congressman, you said that your delegation sensed the growing 
willingness to discuss Taiwan's future with the KMT — is it just the fact that 
they mentioned that they had spoken with the KMT twice before or was there 
anything else that led to this reasoning? 

Mr. Wolff. This was brought up several times during our discussions. 

Question. They actually said that thev are willing in the future to discuss 
the matter with the KMT? 

Mr. de la Garza. I asked the question of one of the officials — why do you 
not — the brothers on the Mainland and the brothers on the island of Taiwan — 
settle the difference without involving us, the United States.? Why don't you 
settle — if you say that this is an internal matter, why don't you handle that and 
separate it from your normalization of relationship with us? His statement was — 
among other things — twice before we have worked together, we have been ad- 
versaries — haven't w T orked at times — but twice before w r e have worked together; 
there is no official communication and there has been no official communication 

35-200—78 7 



90 

with Taiwan, but you cannot rule out a third time. That was the statement. 

Question. Would you like to see the United States Government encourage 
Taiwan and its officials to carry out this discussion? 

Mr. de la Garza. I accept the fact that this is an internal matter for them 
to decide. 

Question. So the United States Government encourages Taiwan to participate? 

Mr. de la Garza. I accept the fact that it's up to Taiwan and the Mainland 
to decide whether they want to discuss or not. 

Question. Mr. Congressman, last 3*ear you had the idea of a possible referendum 
for residents on Taiwan — did you have this idea — or did the Chinese raise this 
idea with you or did j t ou raise it with them? 

Mr. Wolff. We did not raise it, but it has been the policy — the United States 
policy — for a number of years for the people who are residents of a particular 
area to make their own determination; we certainly do not want to interfere 
in the internal affairs of another nation. 

Question. Have you any reaction of the PRC in Washington to that idea? 

Mr. Wolff. No. I have not. 

Question. Mr. Congressman, } r ou said that it is a matter of possible negotiations 
with Taiwan — Mr. de la Garza has just mentioned one instance — what was the 
other instance — what was the nature of the other instance? 

Mr. Wolff. It was volunteered by the people we spoke to at several points 
in our discussions that this was — once in response to a question if I recall it, a 
question as raised by Mr. de la Garza, but the other times it was raised volun- 
tarily and independently. 

Question. In the same form that you've talked to them before that they 
might be able to talk to them again? 

Mr. Wolff. Yes, I would say so — not only talk to them before 

Question. In a single conversation or once in several conversations? 

Mr. Wolff. It was raised several times in a single conversation. 

Question. They never said anything that, well, we've talked to them before 
but clearly ''those murderers on Taiwan," or something like that, to start in a 
position to talk to us 

Mr. Wolff. Not — to the contrary it was, as I indicated before, there was none 
of the rhetoric that we heard before about the "murderers" and what-have-you. 
In fact, it was mentioned that at the time they got together during the Japanese 
occupation there had been a great amount of killing by the KMT, however, the — 
some of the people of the KMT went to school with some of the leaders of China, 
so the KMT was mentioned in a much more conciliatory frame. I would say 
that they were harder on the "Gang of Four" than they were on the people of 
Taiwan. 

That's right. 

Question. Did they actually express any willingness to conduct such talks with 
the KMT? 

Mr. Wolff. I'm sorry. 

Question. Did they actually express any willingness to conduct such talks? 

Mr. Wolff. I don't think we can go further than to repeat what has been said 
on this in the fact that it was they who raised the point — we did not raise this 
point with them; and regardless of how the question is framed, I can only give 
you the answers they gave to us and that have already been indicated by several 
of the members here. 

Question. Mr. Chairman, what have you to say to the contention — we're out 
of the way — with the three conditions that their job would be much easier for 
thorn to handle? 

Mr. Wolff. I must indicate that there was a very strong admonition and a 
very strong statement that was made that does not rule out by any means the 
ultimate use, if necessary, of force to reunite the Mainland and Taiwan. They 
would not rule that out as an alternative. 

Question. Did the question of U.S. arms sales to Taiwan come up? And in 
what way? 

Mr. Wolff. It did come Up and there was a statement made that if U.S. planes 
were sold to Taiwan it would interfere with the negotiated settlement of the 
Taiwan issue. 

QUESTION. They are balking about sales of U.S. planes to Taiwan now or after 
normalization? 

Mr. Woi.i ■!••. Will, if they do not want it now, they surely would not want it 
later on. But the fact st ill remains that t hey did make a point of the question of the 
plane Bales that are talked about. They (lid not mention third party planes sales 

at all, however. 



91 

Question. Did you people talk about Vietnam at all? 

Mr. Wolff. Yes, we did talk about the question of Vietnam. Docs anyone here 
want to address themselves to that? None of my colleagues will— I will try to. 
They call Vietnam the "Asian Cuba". And indicated that Vietnam was strongly 
controlled by the Soviets and that the Soviets were usin^ Vietnam defense facilities. 

Question. Some of the local press here in Hong Kong suggested that if the 
Soviets made missile bases in Vietnam, did the Chinese indicate to you whether 
the Soviet military presence there was a threat? 

Mr. Wolff. Thiey did not — the only thing they did indicate to us was that the 
Soviets were making use of defense facilities in Vietnam — they did not elaborate, 
however. Excuse me, I think the gentleman over there had a question. 

Question. IIow r would you characterize the mood over Vietnam? 

Mr. Wolff. Their mood over Vietnam? I think certainly not one of fear, but 
one of great concern. In fact, it was in response to part of the discussions on Viet- 
nam itself, a statement was made that so far as Vietnam is concerned, as part of a 
Soviet encirclement plan, that the PRC — the People's Republic of China — was, 
has been encircled many times, but they have always broken through the 
encirclement. 

Question. Some American diplomats have suggested the falling out between 
China and Vietnam provides the U.S. with the golden opportunity to go ahead and 
normalize relations with Vietnam. Did you sound out the Chinese how they feel 
if they suddenly made up with Hanoi? 

Mr. Wolff. We did not specifically ask that question because as we don't want 
to interfere in their relations, we don't want them to interfere in our relations. But 
I think that from the tone that was evidenced by their concern over Vietnam, 
which they indicated was trying to creep into ASEAN and undermine ASEAN, 
that it would at present time have an impact upon our relations with them. 

Tenny, do you want to take that question? 

Mr. Guyer. I think that in our conversations with various people even as late 
as this morning before I came to breakfast, that they're very near to normalization 
with us and they very dearly want to narrow that gap, but it's a matter of stale- 
mate over the missing persons situation that really holds them back; and I think 
it's almost like a change of prisoners if each would start to cross the bridge. It 
might be accomplished, but there has to be evidence of goodwill or this will never 
happen. I don't think that the United States Congress is going to approve stopping 
the embargo until they make some other gestures to finalize and give a full and 
accurate accounting of those who are still missing, which is now less than 500. 
I think the last figure I saw was 487 — we still have as prisoners of war or missing 
in action, and then there are 1,300 known dead but not recovered. Some gesture 
of finalization in that area w r ould bring normalization very close. 

Question. Congressman Guyer, could you give us a sense of whether normaliza- 
tion in Vietnam might jeopardize normalization with China? 

Mr. Guyer. No, I don't think that that kind of conclusion should be draw r n 
because just as Mr. Wolff said they are very adamant about us staying out of 
their other relationships and they do not pretend they're into ours. 

Question. Congressman, did you get any sense what their attitude is at the 
moment for us leaving a trade office, an official trade office in Taiwan after nor- 
malization or else putting out a unilateral statement about the need of maintain- 
ing peace in the Taiwan straits? 

Mr. Wolff. Not as such except that with a peaceful transition that the United 
States could, if we just look at the Japanese situation as an example, that the 
United States could maintain its normal non-governmental relationships with 
Taiwan. 

Question. Congressman, could you give an estimate or appraisal of the relative 
degrees of Chinese concern with Vietnam, with regard to the Soviet Union, and 
in regard to the problem of Vietnam/Chinese, with regard to Cambodia — sort of 
evaluate the relative degrees? 

Mr. Wolff. I think there is very serious concern over what is happening in 
Vietnam and the Vietnam/Cambodian situation. But I think that the — both they 
and the world are somewhat overreacting to the Vietnam/ Cambodian conflict be- 
cause it is not anything that's new. This has gone on for centuries. A conflict 
between Vietnam and Cambodia. The rivalries and the intense difficulties that 
have existed, have existed now for centuries and the rage back and forth there 
has always gone on. We in the Congress are very concerned with what's happen- 
ing in Cambodia, the fratricide if you want to call it that, that has taken place, 
the mass killings that have taken place there and Congress has expressed great 
concern for the welfare of the people of Cambodia. 



92 

The Chinese — I do not think — feel the situation in Cambodia versus Vietnam 
is as critical to them as the Soviet intrusion into Vietnam, which gives the Soviets 
a base of operations, as they put it, for further activity in that area, and for the 
Soviets to be able to maintain a position of being able to interfere with trade 
through possible naval bases, and supply of energy to Japan as well. They voiced 
serious concern over the pattern that is emerging of Soviet moves in various 
places where coups have occurred and regimes that are favorable to the Soviet 
Union have been set up. 

Question. Congressman, did you ask them if the}'- are really serious about 
evacuating Chinese from Vietnam and if so, how many people they estimate they 
might take out of Vietnam? 

Mr. Wolff. This question was not discussed. 

Question. Mr. Wolff, did they betray any concern such as has been voiced by 
the Left Wing Chinese press in Hong Kong, that Taiwan might in some future 
situation seek an understanding with the Soviet Union? 

Mr. Wolff. They indicated a contrary position. They indicated when one of 
our members raised the question as to whether or not an accommodation or 
actually a take-over or some sort of basing of Soviet facilities on Taiwan, they 
said they are anti-Communist as well on Taiwan, therefore they could not see the 
accommodation being reached by the Taiwan Government and the Soviets. 

One final question. 

Question. Congressman, did you discuss with official Americans in Taiwan or 
here or Peking what you have been told what the Chinese have raised about their 
past history of cooperation with Taiwan? And how significant did they take 
what you have been told? 

Mr. Wolff. First of all I can saj' that we did give them the same type of report 
that we are giving to you. We gave them the report first however, instead of 
coming to the press first, and I cannot speak for our China watchers except to 
say that they were interested in what we found out. 

Question. Thank you, Mr. Chairman. 



APPENDIX C 



Teng Hsiao-ping Interview with Japanese Journalists 

(By Correspondent Kondo) 

Peking, Sept. 6. — Vice Chairman Teng Hsiao-ping, at a September meeting 
with visiting Japanese senior editorial writers including Junndsuke Kishida of 
Asahi Shimbun, expressed his frank views on the Japan-China relations and other 
general international issues such as the Sino-U.S. normalization issue and the 
worsening PRC-SRV relations, particularly noteworthy were his remarks which 
seemed to verify recent exchanges between the United States and China on the 
Taiwan issue. 

Vice Chairman Teng said that China is paying attention to the fact that the 
United States lately has been taking a somewhat more positive attitude over the 
normalization issue. However, he hinted that there is no clear prospect yet as to 
the time of normalization. The reason is that the Taiwan issue still remains the 
only major obstacle to the normalization of relations between the United States 
and China. Concerning the liberation of Taiwan, China has consistently been taking 
the position that it is "China's domestic affair and no foreign countries are allowed 
to interfere. " It has been insisting that the method of Taiwan's liberation will 
be determined by China, and that no third country should meddle in it. 

In his remarks Teng disclosed that the United States had proposed that "China 
pledge itself not to liberate Taiwan by force of arms in return for the U.S. ac- 
ceptance" of the three-point Chinese demand for the normalization of the U.S.- 
China relations — (1) abrogation of the U.S. -Taiwan Mutual Defense Treaty; (2) 
withdrawal of the U.S. military forces from Taiwan; and (3) severance of the 
U.S.-Taiwan relations. China, Teng disclosed, resolutely rejected the proposal 
because the Taiwan issue is China's domestic problem and the method of itg 
liberation will be decided by China. 

He indicated that China has not given up the use of armed force as a means to 
liberate Taiwan by saying that "if we should pledge not to use the force of arms, 
it would become a major obstacle to the unification of our country. It would allow 
Taiwan to behave more arrogantly. It would even make the unification by peace- 
ful means — by talks — difficult." 

At the same time, he said that "we let the United States know that we will 
resolve the Taiwan issue by an appropriate formula based on realities." Thus, 
it is noteworthy that while holding on to the use of military force as the last resort 
for Taiwan's liberation, China actually desires the liberation by peaceful means. 

Following is a summary of Vice Chairman Teng's remarks: 

U.S. -China Relations 

We are paying attention to the fact that the United States has been taking 
a somewhat positive attitude but it is very difficult to say when (the normaliza- 
tion) will be realized: Our position is clear, the Taiwan issue is the only obstacle. 
In order to resolve the Taiwan issue, China made a three-point demand — that is, (1) 
abrogation of the U.S.-Taiwan Mutual Defense Treaty; (2) withdrawal of the U.S. 
military forces from Taiwan; and (3) severance of the U.S.-Taiwan diplomatic re- 
lations — while the United States has presented many formulas. One of them is the 
"reverse liaison office formula" (calling for the establishment of liaison offices 
in Taipei and Washington instead of the present system of the liaison offices in 
Peking and Washington, and for embassies in Peking and Washington). Another 
U.S. formula calls for a Chinese pledge not to liberate Taiwan by force of arms in 
return for the U.S. acceptance of the three-point Chinese demand, China clearly 
rejected both. 

(93) 



94 

We let the United States know that when we resolve the Taiwan issue, "We will 
resolve it by an appropriate formula based on Taiwan's realities." At my meeting 
with a U.S. delegation which visited China recently, I said that "If we should 
pledge ourselves not to use the force of arms to liberate Taiwan, it would become a 
major obstacle to the unification of our country." Such a pledge would even make it 
impossible to hold peaceful talks on the unification of the country. We want the 
United States to consider this point. 

How Taiwan should be liberated is China's domestic issue and no one is allowed 
to interfere. However, we have told the United States that, in resolving the Taiwan 
issue, we will use an appropriate method of agenda realities. For the U.S. -China 
normalization, the Japanese formula is preferable. That is (the United States and 
Taiwan) should cut off all "official" relations between them, leaving nongovern- 
mental relations including private trade to continue. 

ARMS BUILDUP AND DISARMAMENT 

Following the U.S. signing of the third agreement (regarding the strategic arsm 
limitation) with the Soviet Union in Vladivostok, then Secretary of State Kissin- 
ger flew to Peking to brief us on the content of the U.S. -Soviet talks. He said that 
neither the United States nor the Soviet Union could restrain the other side. I 
said to him: "Your two countries might as well continue the arms race." As 
chairman Mao Tse-tung said. A future war will not necessarily be a nuclear war. 
When nuclear weapons are available in large quantities, no one can recklessly 
trigger a nuclear war. When a new war comes, it will problably be a war fought 
with conventional arms, therefore, while the West has neglected conventional 
arms, the Soviet union has carried out mass production of these weapons as well 
as nuclear weapons. As a result, the Soviet Union now has more conventional 
weapons than the United States and European countries combined. It is impossible 
to cuib the arms race with the help of atmosphere (Funiki) or a disarmament 
agreement. However, there is no thing like a buildup of one nation's self-defense 
capabilities to arouse another country. 

(Regarding China's participation in a reorganized world disarmament com- 
mittee) China has yet to study the problem. If disarmament should occur, the 
United States and Soviet Union should carry it out. It is not necessary for China 
or Japan to do so, as for nuclear weapons, we do not need many — just enough to 
return a strike, if money from the arms race is saved, it should be spent to improve 
people's living standard. 

THE VIETNAM ISSUE 

China didn't drive Vietnam into the Soviet camp. We gave Vietnam S20 
billion in aid; nevertheless, Vietnam joined the Soviet camp a long time ago. 
The Soviet Union should now shoulder this burden (aid to Vietnam) alone. 
Vietnam had effectively been utilizing Sino-Soviet relations; now that China has 
quit Vietnam, Vietnam will have only the Soviet Union to depend upon and, the 
longer it does so, the more problems it will have. 

The Soviet Union ships military supplies to Vietnam but cannot afford to 
give it enough daily necessities. Therefore, it made Vietnam join the CEMA 
(Council for Mutual Economic Assistance) so as to put the economic burden on 
other member nations. Furthermore, the U.S.S.R. egged Vietnam on to beg things 
from the United States, European nations and Japan. 

There is a basic difference between the Soviet Union's unilateral discontinua- 
tion of aid to and technical cooperation with China, and China's complete 
tion of aid to Vietnam. While the Soviet loan to China was onerous, the Chinese 
aid to Vietnam was mostly gratuitous — it had a low interest rate and we are not 
even pressing Vietnam to pay the balance. 

Regarding Japan's economic aid to Vietnam, Teng said: It is a waste of money, 
if Japan is willing to spend money, well no one can keep it from doing so." 

THE KOREAN QUESTION 

The present tension on the Korean Penninsula is not very great. Peaceful, 
independent unification is the reasonable formula for the reunification of Korea, 
and we respect the Park position. Western media report that relations between 

viet Union and North Korea are good, but I do not agree with th< 
ports. Soviet influence over North Korea is limited. At present, the Soviet Union 
18 attempting to make contacts with South Korea (the ROK), but China i- not 
Considering it (any exchanges with the ROK). 



95 

DOMESTIC ISSUES 

The living standard of the people should be improved. Even if the living 
standard improves in China, aborgeoisie will not be created because all individual 
incomes are limited. There are no such things as privately owned cars or privately 
owned dwellings in our society. Even if the four modernizations are completed, 
it will not mean that China has become an affluent country, even when the modern- 
ization programs have been completed at the end of this century, the living 
standard of our people will still be lower than that of Japanese people because 
China has such a large population. A larger population creates more problems. 



APPENDIX D 



Selected Press Clippings 

[From the Washington Post, July 16, 1978] 
Peking Willing To Talk With Taiwan 
(By the Washington Post Foreign Service) 

U.S. CONGRESSMEN TOLD OF SHIFT 

Hong Kong. — In a major shift of tactics, China's senior Communist leaders 
have told a group of visiting U.S. congressmen that they are willing to negotiate 
directly with their Nationalist Chinese rivals over the future of Taiwan. 

The statements made by Vice Chairman Teng Hsiao-ping, the second ranking 
member in Peking's hierarchy, and other top officials seem to be the most con- 
ciliatory toward Taiwan President Chiang Ching-kuo's Nationalist government 
in recent years. 

They were reported by a U.S. congressional delegation, led by Representative 
Lester Wolff (D-N.Y.), which returned here from China yesterday. 

Although negotiations between Taiwan and the Peking government remain 
unlikely, the statements indicate a new Chinese willingness to moderate harsh 
anti-Chiang public remarks of the past and try to swing American public opinion 
in Peking's favor. 

CHINESE SHIFT ON TAIWAN 

Wolff said the Chinese reminded the nine visiting congressmen that the Com- 
munist Party and the Kuomintang (Nationalist Party) had cooperated twice 
before, during a campaign to defeat local warlords and unify the country in the 
1920's and during the war against Japan in the 1930's and 1940's. 

"There has been no official contact with Taiwan, but j-ou cannot rule out a 
third time," Representative Eligio de la Garza (D-Tex.) quoted one high Chinese 
official as saying. 

At a press conference here, Wolff emphasized that the Chinese also made a 
"strong statement" that did not "rule out by any means the use of force in liber- 
ating Taiwan." The Peking officials also showed no sign of retreating from their 
demand that Washington cut off diplomatic relations with Taiwan, end its mutual 
defense treaty with the Chiang government and withdraw all remaining U.S. 
military personnel from the offshore Chinese island. 

The U.S. Congress and the Carter administration have been reluctant to take 
such steps in order to bring full diplomatic relations with Peking without some 
Chinese guarantee that Taiwan will not be taken by force. Peking has shown little 
interest in making such a promise, but the statements to Wolff's group appear 
designed to soften the image in American minds of warlike Chinese belligerence 
toward the Taiwan government. 

The conciliatory statements were "volunteered by the people we spoke to — at 
several points in our discussions," said Wolff, chairman of the Asian and Pacific 
Affairs Subcommittee of the House International Relations Committee. 

In the past, American visitors to China who asked about Peking's attitude 
toward the Kuomintang have usually boon lectured on Nationalist crimes and 
"blood debits," including the many massacres of Communist Party members 
carried out by Chiang's late father, ( ieneralissimo Chiang Kai-shek. A Peking 
commentary on Chiang's move from the Taiwan premiership to the presidency 
in May said "he has continuously intensified his fascist rule and suppressed the 
people. 1 ' 

But Wolff, who heard similar lectures when he visited China in early 197G, 
said BUch rhetoric was largely absent this time. He said he sensed a "new realism 

in terms of an emerging Chinese emphasis on seeking ways to settle the Taiwan 
question on a bilateral basis, between the Chinese t hem-elves, in ways that are 
acceptable to the parties involved." 

(96) 



97 

He said he also found domestic policies more realistic, as the Chinese move 
away from harsh domestic measures that had been pursued by the "Gang of 

Four," a Peking clique led by Mao Tse-tung's wife Chiang ( thing that was purged 
in late 1976. 

"1 think it's safe to say they were harder on the Clang of Four than on the 
people on Taiwan," said Representative Charles Range] (D-N.Y.) of the Chinese 

officials they spoke to. 

Peking's usual attitude toward Taiwan has heon a plea for people on the island 
to admit their mistakes and come over to the mainland side, rather than a sugges- 
tion of talks. 

In a March 6 speech, Communist Party Chairman Hua Kuo-feng said he hoped 
"military and administrative personnel of the Kuomintang" would "clearly see 
the general trend of events and take the road of patriotism and unification of the 
motherland." 

Peking's last apparent public call for negotiations came in February 1973, 
when former Kuomintang Gen. Fu Tso-yi addressed a meeting in the Chinese 
capital. "We are all Chinese * * * Let us come together and talk," he said in a 
speech supposedly aimed at Kuomintang officials who had not yet come over to 
the Communist side. 

An analyst who has followed Chinese statements closely for the last three 
years said he could not remember any Peking remarks similar to those made to 
Wolff's group. One member of the group said the Chinese noted that earlier 
efforts to cooperate with the Kuomintang had not worked well, but also observed 
that many Communist leaders had attended school with Kuomintang officials. 

Wolff said Peking officials told the group that further sales of U.S. warplanes 
to Taiwan would interfere with negotiations over a solution to the Taiwan issue, 
but the Chinese did not mention sales to Taiwan by other countries. 

The Chinese expressed doubt that the Taiwan government would ever go to 
the Soviet Union for help if the United States severed relations. Washington has 
approved sale of Israeli-made fighters with U.S. -made components to Taiwan, 
but Chiang's government has indicated it prefers to buy more effective U.S. -made 
fighters. Chiang also does not want to hurt his close ties with Saudi Arabia by 
dealing with Israel. 

Taiwan officials have indicated they fear a sharp decline in investor confidence 
in their booming economy if there is the least suggestion of talks with Peking. In 
an interview published in the June Reader's Digest, Chiang called such negotia- 
tions "totally impossible." 

"Negotiation with the Communists is tantamount to suicide. Wliat free world 
country has ever successfully done so?" he said. 

W 7 olff declined to say which Chinese officials had made the suggestion of talks 
with Taiwan, but Representative C. Tennyson Guyer (R-Ohio) said the idea 
had been voiced by Teng, perhaps the most influential Chinese leader in foreign 
policy as well as other areas. The delegation also saw Vice Foreign Minister Wang 
Hai-jung, Vice Foreign Trade Minister Wang Jun-sheng, Foreign Affairs Insti- 
tute President Hao Teh-ching and Peking University President Chou Pei-yuan. 

Others in the delegation were: Representatives J. Herbert Burke (R-Fla.), 
Billy Lee Evans (D-Ga.), L. H. Fountain (D-N.C), James R. Mann (D-S.C.) 
and Larry Winn Jr. (R,- Kan.). 

[From the Baltimore Sun, July 16, 1978] 

"Realism" Rules in China, U.S. Congressman Says 

(By Edward K. Wu, Hong Kong Bureau of the Sun) 

Hong Kong. — A "new realism" about foreign affairs, including relations with 
Taiwan and the United States, prevails in China today, according to the head of a 
U.S. congressional delegation which has just concluded a 10-day visit to the 
People's Republic. 

This "new realism" includes growing Chinese willingness to discuss Taiwan's 
future with the Nationalists on the basis of existing realities, a greater eagerness to 
seek American technology and expertise and a view of relations with the United 
States as part of an overall strategic and political recognition of the realities of 
Soviet expansionism, according to Representative Lester L. Wolff (D., N.Y.), the 
head of the nine-member congressional group. 

Mr. Wolff said in a news conference here yesterday that he and one of his col- 
leagues found this emerging realism the most striking contrast between China 
today and China two years ago. 



98 

Mr. Wolff, the chairman of the House subcommittee on Asian and Pacific 
affairs, visited China in 1976 with Representative J. Herbert Burke (R., Fla.), 
who is also a member of the present delegation. 

While finding no alteration in China's basic position on Taiwan regarding the 
need for the U.S. to withdraw diplomatic recognition and security ties from the 
Nationalists and withdraw all troops from Taiwan, Mr. Wolff said: 

"Our delegation sensed a new realism in terms of an emerging Chinese emphasis 
on seeking ways to settle the Taiwan question on a bilateral basis, between the 
Chinese themselves, in ways acceptable to the parties involved." 

In the wide-ranging discussions with various Chinese officials, including Vice 
Premier Teng Hsiao-ping, the congressmen were reminded that the Communist 
Party and the Nationalists, now the ruling party on Taiwan, had twice in the past 
come together, and their co-operation now for the third time could not be ruled out. 

The Communists and Nationalists formed a united front under Sun Yat-sen's 
leadership from 1924 to 1927 and again during the 1937-45 war with Japan. 

The Chinese remarks were said to have come in response to a question by Repre- 
sentative Eligio de la Garza (D., Texas) as to why the Chinese could not settle the 
Taiwan issue among themselves without involving the U.S. and why the issue 
could not be separated from the normalization of U.S. -Chinese relations. 

Mr. Wolff declined to identify the official who made these statements, only 
saying he was a very high official. It is believed he was Mr. Teng. 

Recent press reports from China clearly indicated that united-front activities 
among the Chinese, including those on Taiwan, have been renewed and 
intensified. These overtures so far have been openly rebuffed by Taiwan's President 
Chiang Ching-kuo, who has repeatedly declared that the Nationalists will never 
negotiate with the Communists. 

The delegation, Mr. Wolff said, heard the Chinese discuss their strengths, 
frankly admit their weaknesses and indicate their desire for constructive sug- 
gestions from the West, particular^ trom the U.S. 

He added that it was the delegation's opinion that the Chinese see their im- 
proved ties with the U.S. as being in both countries' interest. 



[From the Baltimore Sun, July 20, 1978] 

Congressmen Say China Is Eager To Better U.S. Ties, Contain Soviet 

Union 

(By Henry L. Trewhitt, Washington Bureau of the Sun) 

Washington. — Just back from China, a group of congressmen yesterday re- 
ported dramatic acceleration in Chinese efforts to contain the Soviet Union 
through closer ties to the United States. 

Representative Lester L. Wolff (D., N.Y.) said the "new realism" could lead to 
direct negotiations with Taiwan. At least, he judged, it represented greater toler- 
ance for the "realities" of U.S. relations with the rival Republic of China there. 

The findings of Mr. Wolff and his companions supported evidence of growing 
interest in normal relations by both the United States and China. For weeks the 
pattern has developed while world attention was focused on events in Africa and 
the Middle East and more directly on worsening Soviet-American relations. 

The change of climate has developed rapidly, as such things are measured, since 
Cyrus R. Vance, the Secretary of State, was in Peking last August. Then, the 
pragmatism of Teng Hsiao-Ping, freshly rehabiliated as deputy prime minister, 
was just ro-emergin^. 

Since then the United States and China have consulted in only slightly veiled 
fashion about Soviet intervention in Africa. From time to time faint hints have sur- 
faced that China, after all, would not try to unite Taiwan, which the United States 
still protects, with the mainland, by force. 

The number of semi-official exchanges between Washington and Peking is grow- 
ing. A few weeks ago Zbigniew Brzezinski, the President's national security adviser, 
pleased his host enormously by figuratively shaking his fist in the direction of 
Moscow from the top of tin; Great Wall. 

Air. Wolir said yesterday that "surely it was no accident" that President 
Carter's science advisers were in Peking at the s:une time as the congressional 
delegation. Han Hsu, chief of the Chinese liaison office here, recently visited theU.S 
Midw 



99 

Americans who had pictured the Communist Chinese for a generation as humor- 
less automatons suddenly are surrounded by gaily chattering visitors. A perform- 
ing arts company is touring the nation. An agricultural delegation is inspecting the 
soil of the corn belt. 

Some analysts regard all this with wry cynicism. One remarks that "it is almost 
as if we told them: 'You want normalization? Then you'll have to change the 
climate.' " 

There is no doubt that motives on both sides are heavy with global politics. In 
fact, the cross-currents of relations involving China, Southeast Asia, the Soviet 
Union, the United States and even Japan are becoming more complex daily. Tor 
every possible benefit there is an offsetting risk. 

But there is brisk new life in the process former President Nixon started by open- 
ing the door to China in 1972. The United States is toning flown the relations 
it will maintian with Taiwan, hoping for minimum damage to its reputation as an 
ally. Without committing themselves, the Chinese appear to be relaxing their own 
terms for normalization. 

However it is not really changing those terms. China says the United States must 
end diplomatic relations and its defense treaty with Taiwan, as well as remove its 
remaining symbolic military presence. 

Something like the so-called Japanese formula, the Chinese suggest, would be 
fine. That means continuing, as Japan has done, vast economic relations — but not 
political ones — with Taiwan while formally recognizing Peking. The understanding 
of course, is that the economic ties themselves amount to a commitment of inter- 
est the mainland would not threaten. 

That still is not enough for the U.S. administration, even in its speculative mo- 
ments. Besides economic commitments, for example, officials here say the United 
States must be free to provide defense equipment to Taiwan as needed. 

They also want more direct assurance that Peking will not try to reunite China 
by force — one of the stickiest points. A solution still appears to be a considerable 
distance in the future, but Mr. Wolff and six of his colleagues agreed that China is 
ready to increase contacts greatly without a final political resolution. 

Mr. Wolff reported evidence of "a growing Chinese willingness to discuss 
Taiwan's future" with the present leaders of Taiwan. Not all members of his 
delegation agreed with his analysis, however. American diplomats suggest that 
direct discussions between the Chinese rivals are a remote possibility. 

But most American specialists do agree that China is softening the edges of 
its position. It needs technology and manufactured products. More important, 
it is looking for a strategic relationship as protection against the Soviet Union. 

"Our delegation emerged," Mr. Wolff said, "with a definite sense of the sober- 
ing effects of the very real strategic and political problems facing China in the 
form of the Soviet Union — the 'polar bear' — and what the Chinese call the, Soviet 
Union's 'Asian Cuba,' Vietnam." 

Soviet influence in Vietnam has grown steadily since the United States was 
expelled and Hanoi came to rule the whole country. Chinese relations with Vietnam 
have eroded to the point that China ended all aid to its former client. China now 
is confronted with a classic danger of strategic encirclement. 

But these very issues are forcing the United States to move slowdy. It hopes to 
improve relations with Vietnam, diluting Soviet influence, in a way that China 
will not only accept but applaud. At the same time it has enough problems with 
Moscow already on other issues. 

President Carter's reaction to the changing pattern still is not clear. Official 
language remains several stages short of obvious actual positions in the strategic 
tangle. In fact, official U.S. public positions call simply for even-handed develop- 
ment of relations with all the countries involved. 

Yet by most private assessments, difficult decisions are ahead for Mr. Carter. 
Vietnam appears to be discarding claims for reparations as a precondition for 
formal relations. China is knocking the rough edges from its arguments. The 
Russians mutter ominously about the intentions of China and all who encourage 
them. 

"I wonder what we would do," an American diplomat says, "if the Chinese 
suddenly made us an offer that was obviously within our terms." 

Nothing so precise seems likely. But to Mr. Wolff and others who have talked 
politics with Chinese officials recently, their interest in rapid movement is genuine. 

"Our delegation emerged," Mr. Wolff said, "with the clear sense that Peking 
sees a climate of understanding and co-operation with the U.S. as the best path 
to normalization, and that normalization is a key strategic and political move for 
China in the world arena, specifically against the Soviet Union." 



100 

Repeatedly, he said, Chinese leaders argued that Moscow fears two actions by 
China: formal ties with the United States and a treaty of peace and friendship 
with Japan. They warned equally against appeasement either by providing 
technology to the Soviet Union or by failing to counter Moscow's strategic moves 
around the world. 

The Chinese call appeasement "feeding the polar bear chocolates." It is a 
curiously innocent phrase to apply to some of the most critical decisions before 
the most powerful nations in the world. 



[From Business Times (Malaysia), July 28, 19781 

The Impasse Over Taiwan 

(By Harvey Stockwin in Hong Kong) 

Taiwan is the joker in the high-stakes card game among the three superpowers . 
While relations between the U.S. and Russia worsen, the island hampers closer ties 
between America and the Chinese mainland. 

As Soviet-American relations deteriorate, and Sino-Soviet hostility increases, 
relations between China and the U.S. are slowly improving. But the long-awaited 
normalisation of Washington-Peking ties still awaits resolution of the impasse over 
Taiwan, with the Nationalist and Communist Chinese still far removed from 
creating their own "one China" solution. 

"Our friendship with Chiang Kai-Shek," Chairman Mao Tse-tung told former 
President Nixon in 1972, "is much longer than the history of j-our friendship with 
him." This Mao thought was taken a step further recently as the latest Congres- 
sional delegation, led by Mr. Lester Wolff, chairman of the House of Representa- 
tives Subcommittee on Asian and Pacific Affairs, visited the People's Republic. 
The delegation detected "a new realism" in Chinese official attitudes, notably 
towards Taiwan. In 1972, Mr. Nixon and Chairman Mao joked about Mao and 
Chiang calling each other "bandits." The latest American visitors did not even 
hear such epithets. "They were harder on the Gang of Four than they were on 
the People of Taiwan," one Congressman recalled. 

Along with the absence of abuse, Chinese officials several times volunteered the 
thought that the Communists were willing to discuss Taiwan's future with the 
Nationalists "on the basis of existing realities." According to Mr. Lester Wolff, 
"our delegation sensed * * * an emerging Chinese emphasis on seeking ways to 
settle the Taiwan question on a bilateral basis between the Chinese themselves 
in ways acceptable to the parties involved. * * *" 

"The historical fact was raised twice in the past the Chinese Communist Party 
and the Kuomintang have come together and cooperated when it was in their 
common interest — first during the time of Doctor Sun Yat-Sen and the northern 
expedition, and again toward liberation during World War Two." 

Since Chinese officials often prefer to talk to foreign delegations on a non- 
attributable basis, Mr. Wolff did not say who particularly stressed these points. 
The Congressional delegation had however a lengthy interview with Chinese Vice- 
Premier Teng Hsiao-ping, as well as Vice-Foreign Minister Wang Hai Jun and 
Vice-Minister for Foreign Trade Wang Jun Sheng among others. 

Mention of the possibility of Peking-Taiwan negotiations is interesting, since it 
comes at a time when there is some movement in Sino-American relations, after 
a period when normalisation appeared as far off as ever. The critical unresolved 
problem is twofold. Internationally, the United States cannot be seeD to be merely 
giving in to China's three demands (the abrogation of the United States-Republic 
of China mutual security treaty, the removal of U.S. troops from Taiwan, and the 
breaking of diplomatic relations with Taiwan) without making some provision 
for the continued security and well-being of Taiwan. 

Domestically, neither President Carter, Secretary of State Vance, nor any other 
administration spokesman has yet tried to create a consensus within the United 
[States on the issue. Opinion polls continue to show a U.S. majority favouring 
normalisation, but this majority evaporates if normalisation carries the price 
Peking consistently attaches to it. 

President Carter himself straddled but did not resolve the dichotomy during 
his campaign, when be pledged thai he "would never let friendship with the 

People's Republic of China stand in the way of t he preservation of the independ- 
ence and the freedom of the people of Taiwan.'' 



101 

In 1977 there was no basic change in the Sino-American status quo. Secretary of 
State Vance went to Peking in August to try out various formulas for bridging 
the gap. Mr. Carter hailed progress, but Mr. Teng Hsiao-ping denounced the visit 

as a "set-back." 

This year, as American-Soviet relations deteriorated, Washington has tried 
other tracks. National securit}^ adviser Zbigniew Brzezinski went to Peking in 
May to discuss broad strategy but not to negotiate normalisation. China has 
responded by making it clear to the Wolff group that it does not want to be merely 
a card played against the Russians. Similarly, President Brezhnev, a month ago 
in a speech at Minsk, warned the United States against playing the China card in 
relation to Russia. 

Nevertheless, there would seem to have been some Sino-American card-playing, 
with Mr. Brzezinski making some direct — many diplomats would say clumsy — 
anti-Soviet remarks on the Great Wall of China. Mr. Brzezinski's visit has been 
followed up by a high level U.S. scientific and technological mission, accompanied 
by two top foreign policy officials to Peking — the same kind of delegation that 
would have gone to Russia, except that it was cancelled, due to the Soviet trials 
of dissidents. 

Meanwhile, the Carter administration has inched toward normalisation with- 
out talking any decisive steps. Two American libraries have been closed in Taiwan, 
ostensibly for budgetary reasons. 

U.S. military forces have been further reduced on Taiwan from 1,500 at the end 
of the Ford administration, to 1,000 todaj-, and they will be down to 400 by the 
end of the year. 

Reports from Washington indicate that residual military and economic aid to 
Taiwan will be absent from the Carter budget for the next financial year. The 
Carter administration has approved the sale of Israeli-made Kfir jet fighters to 
Taiwan — the planes have U.S. engines. The Kfir carries less payload, and has less 
range, but is faster than the Phantom F4 jets which Taipeh has been trying to 
purchase for several years. 

Significantly, Chinese officials told Mr. Wolff that American jet sales to Taiwan 
would complicate a peaceful solution of the Taiwan problem and hinder normalisa- 
tion — "but they raised no specific objection to third country sales." 

So the Taiwan government of President Chaing Ching-kuo can be forgiven for 
calculating that the Americans are moving towards Peking, and getting ready to 
abandon Taiwan by stealth. Aid cuts, library closures, and military reductions, 
while not critical in themselves, are resented as unnecessary concessions, even if 
they leave Taiwan no weaker than before. 

Taiwan is busy developing a substantial relationship with Saudi Arabia, so it 
is not immediately well-disposed to American efforts to please the Israelis. It is 
not currently negotiating for the Kfir fighter, though it has shown interest in the 
past, and will need something more sophisticated than its current F5s for air 
defense in the 1980s. The Taiwan application for Phantoms remains on the table. 

Against this background, Chinese hints about the possibility of Peking-Taipeh 
negotiations in the future offer more hope to the U.S. than to Taiwan. 

The Americans have been making little if any headway in their attempts to 
secure from China some pledge about the peaceful solution of the never-ended 
Chinese Civil war, such as might make the U.S. Congress more amenable to the 
abrogation of the United States-Taiwan security treaty. 

Obviously, were China and Taiwan to substitute accord for antipathy, it would 
be that much easier for President Carter to grasp the normalisation nettle. But 
as Taiwan reacted to Mr. Wolff's comments, and as China reacted to Taiwan, the 
normalisation ball was left bouncing elusively around in Mr. Carter's court. 

For Taiwan, the cooperative precedents cited to Mr. Wolff by the Chinese 
hardly offer encouragement. The northern expedition ended with Mr. Chiang 
Kai-shek purging the Communists, and Mr. Chou En-lai fleeing for his life from 
Shanghai. The uneasy wartime united front against the Japanese was only secured 
by the Communists after Mr. Chiang Kai-shek had been kidnapped at Sian in 
1938 by his own troops. 

With those and other memories, it was hardly surprising that a Taiwan Foreign 
Ministry spokesman on July 17 maintained that "we have had bitter experiences 
in negotiating and co-operating with the Chinese Communists in the past, and 
therefore we will never hold talks, or get in touch with them." 

On the other hand, Taiwan fears — realistically, in the view of responsible 
State Department sources — that the only thing China will negotiate is their 
surrender. The time is not ripe for China to be satisfied with a mere token ac- 

35-200— 7S 8 



102 

knowledgment by Taipei of China's sovereignty over Taiwan, in return for 
which Mr. Chiang Ching Kuo would be allowed to continue to preside unfettered 
over Taiwan's flourishing economy. 

On the other hand, any attempt by the mainlanders ruling Taiwan to reach 
a one-China compromise could affect, political stability, since it would secure a 
hostile reaction from the 14 million native-born Taiwanese. 

For the latter, Mr. Chiang Ching-Kuo's continued rhetoric about "reconquering 
the mainland" offers security, since it indicates continued willingness by the 
government to sustain a Taiwan identity separate from that of the People's 
Republic. 

Thus, for the time being, nationalism (with a small n) on both sides of the 
Taiwan Straits is unlikely to be equal to the compromises which meaningful 
negotiations would inevitably entail. This was emphasised on July 18 as the New 
China News Agency attacked Mr. Chiang Ching-kuo for following his father's 
policies and "selling Taiwan out to foreign interests." 

The agency's article indicated that, "new realism" not withstanding, China 
wall expect to have its normalisation cake and eat it too. Taiwan was attacked 
both for trying to retain its close American links and for hints in the Taiwan 
Press that it may develop ties with the Soviet Union. 

This contrasts with what the Wolff party was told. When they raised the pos- 
sibility of Taiwan-Russian links, high Chinese officials expressed confidence that 
Taiwan's anti-Communism would inhibit any Taipeh-Moscow detente. 

Conceivably, the NCNA writer had not got the same message from above, 
but the article indicated the obvious — that China would react forcefully were 
Taiwan to ever contemplate playing a Russian card against China. The irony is 
that China accuses Taiwan of trying to disrupt Sino- American normalisation, 
while also objecting to the situation that a normalisation, on China's terms, 
alone, might bring about. 

So President Carter faces the old dichotomy plus an additional element. He 
must not merely try to elevate Sino- American relations without further exacerbat- 
ing United States-Soviet relations and destablising Taiwan. He also has to main- 
tain sufficiently strong links with Taiwan to make sure that Taipeh does not feel 
desperate, and that China's paranoia in regard to the "polar bear" is not en- 
hanced as a consequence. 



[From the Christian Science Monitor, July 17, 197S] 

"New Realism" on Taiwan: Peking Edges Toward U.S. 

(By Frederic A. Moritz, staff correspondent of the Christian Science Monitor, 

Hong Kong) 

China appears to have altered its position on the main obstacle to "normaliza- 
tion" of relations with the United States, the problem of Taiwan. 

Although displaying what is termed "a new realism," China's leaders still have 
not ruled out the use of force to gain control of the island Republic of China. 

But out of concern over possible encirclement by the Soviet Union and its ally, 
Vietnam, they have endorsed an approach they once ruled out— -settlement of the 
Taiwan problem through talks with the Kuomintang (Nationalist Chinese) 
government of President Chiang Ching-kuo. 

This is the message brought back after a 10-day trip to China by U.S. Repre- 
sentative Lester L. Wolff (I)) of New York, chairman of the House of Representa- 
tives Subcommittee on Asian and Pacific Affairs. 

A conciliatory framework 

In a July 15 Hong Kong press conference, he explained that Vice-Premier Teng 
Hsiao-ping and other high Chinese officials had outlined the new approach to him 
and other visiting I'.S. congressmen in Peking. 

Mr. Wolff said the discussion of Taiwan contrasted sharply with one he had 
had with Chinese leaders two years earlier. 

"There was none of the rhetoric we had heard before of the 'murderers on 
Taiwan.' Taiwan was mentioned in a much more conciliatory framework," he 
explained. 

Mr. Wolff's reporl comes at .-i time when China is stressing the need for increased 
cooperation with the United States, both to oppose the Soviet Union and for 
technical assistance in modernizing China. 



103 

The Chinese press, for example, has been widely publicizing aid in agricultural 
mechanization given by four American engineers and technicians in an area near 
the border with the Soviet Union. Teng Esiao-ping recently told a visiting Ameri- 
can science and technology delegation dispatched by President Carter thai China 
will learn advanced science and technology from all countries, Including I In- 
United States. 

IMPASSE REMAINS 

The apparently moderated Chinese position does uot directly break the im- 
passe between China and the United States over Taiwan. China demands that 
the U.S. withdraw all military forces from the island, sever the mutual security 
treaty, and break off diplomatic relations with the government of President 
Chiang. 

For its part the U.S. says it can make such concessions only if China recognizes 
Washington's commitment to a peaceful settlement of the dispute. But P< 
insists it retains the option of using force to settle what it regards as an internal 
Chinese matter. 

Still, if Mr. Wolff's account of what he was told is accurate, China appears to 
have shifted its emphasis in a way that could lead to at least limited cooperation 
and perhaps a form of peaceful coexistence with Taiwan's leaders. 

BUT WOULD TAIWAN AGREE? 

If such a relationship were gradually to develop, China would be accepting a 
peaceful course toward settlement of the Taiwan question, thus meeting one of 
the American requirements for normalization of relations. 

But one big question is whether Taiwan's President Chiang is at all open to this 
approach. To deal with the Chinese Communists would in effect require a total 
transformation of the Nationalist claim to be the government of all of China, in- 
cluding the mainland. 

The Taiwan Government is set up with representatives from all of China's 
provinces, and Taiwan itself officially is ruled as just one province headed by a 
governor. So far this arrangement has been justified by the Nationalists' declared 
aim of "recovering" the mainland. 

Also it is unclear how much of a change in Taiwan's system of government 
would be required by Chinese Communist leaders in order for them to deal with 
the Nationalists. 

COMMENTS CONFIRMED 

The new Chinese approach, as outlined by Representative Wolff, was first 
disclosed in late May by Chen I-sung, standing committee member of China's 
National People's Congress. 

In an interview with Japan's Kyodo news agency, Mr. Chen said that if the 
United States accepts China's three conditions for normalization, there would be 
no liberation of Taiwan by force, so long as Taiwan's President Chiang were 
willing to hold peace talks with China. "China will never kill a peace-seeking 
Chiang," he was quoted as saying. 

Although Mr. Chen is not a member of the Communist Party, a Chinese 
representative has confirmed that his comments were a trial balloon designed to 
hasten normali z at i on. 

Mr. Wolff said high-ranking Chinese officials cited as precedent for cooperation 
with Taiwan two previous occasions on which the Communists and the Kuo- 
mintang had cooperated. One was in the 1920s during the campaign to unify 
China and end warlord rule. The other was during World War II, when Japan 
was a common enemy. 

[From the Far Eastern Economic Review, July 2S, 197S] 
China on the World Stage 
(By David Bonavia) 

DIPLOMATIC RELATIONS BETWEEN CHINA AND OMAN IS A LOGICAL MOVE IN PEKING'S 

FOREIGN POLICY 

Ideology has been the first casualty of China's drive towards a more dynamic 
and effective foreign policy. A decade ago, ideology dominated Chinese foreign 



104 

policy to such an extent that the policy barely seemed to exist any more in its own 
right. Now the opposite is true: the ideology, such as it is, is dictated by the real 
situation. 

A foreign policy is based principally on relations with other governments — 
something China found to its cost in the late 1960s, when it disregarded the effects 
of its policies on governments, in the interests of appealing to what it believed to be 
mass movements sympathetic to itself. The result was almost complete isolation 
and encirclement by powerful enemies. China is not about to make the same 
mistake again. Its foreign policy since 1971 has been aimed at rallying as broad as 
possible an international front to oppose Soviet expansionism, just as in the late 
1950's it sought to broaden the anti-American front through recruitment of the 
nonaligned movement. 

Chinese disillusionment with the nonaligned movement today is reflected 
explicitly in commentaries about the machinations of Cuba — which claims to be 
non-aligned — and implicitly in its numerous statements about the need for the 
Third World to unite against Soviet "hegemonism." The fact that some Third 
World countries, such as Angola and South Yemen, have clearly aligned themselves 
with Moscow, makes rather a nonsense of the non-aligned movement from China's 
point of view. At best it can be seen as a way by which countries like Burma express 
their desire to be left alone. 

Disappointed by the strategic possibilities of an alliance of the developing 
countries, China has turned increasingly towards the West for an understanding 
about mutual security. The two things are linked, as was made clear this month 
to an American congressional delegation headed by Asian and Pacific Affairs 
Subcommittee chairman Lester L. Wolff, which visited Peking and had talks with 
yice-Premier Teng Hsiao-ping and other senior officials. 

As Wolff put it, his delegation got "a definite sense of the sobering effects of the 
very real strategic and political problems facing China in the form of the Soviet 
Union — the 'Polar Bear' — and what the Chinese call the Soviet Union's 'Asian 
Cuba/ Vietnam." This was not in itself new, but the Americans got the clear 
impression that in the face of these strategic threats, the Chinese were more willing 
than before to consider patching up their quarrel with Taiwan, presumably in the 
interests of a closer understanding with the United States and the desire to present 
a more united front to a world where the Soviet Union and its allies are daily 
gaining ground. 

Specifically, the visitors were told that the Chinese Communist Party had 
cooperated with the Kuomintang in the past, and could do so again, "on the basis 
of existing realities." It was no coincidence that, shortly before the Wolff dele- 
gation's visit, China opened diplomatic relations with the oil-rich Gulf state of 
Oman. Observers familiar with the politics of the Gulf say Oman would never have 
made such a move without counting on the eventual approval of Saudi Arabia, 
which itself maintains diplomatic links with Taiwan. Although the Saudis were 
thought unlikely to compromise their own fierce anti-communism by switching 
recognition to Peking, it is believed they will look reasonably benignly on relations 
between China and other countries of the area, such as the United Arab Emirates, 
Qatar and Bahrein. 

The paradoxical situation is indicative of China's strategic posture worldwide. 
Lacking the money and resources to exercise concrete influence on places as 
distant as the Gulf, China can count only on modest trading relations (its con- 
sumer goods being particularly well suited to the Middle Eastern market) and 
on the desire of rich but small states in the area to see some counter-balance to 
the creeping advance of Soviet influence. Thus anti-communism becomes China's 
best ally. 

The Soviet Union has not done well in the Middle East lately. Its relatively 
strong position in "democratic" South Yemen can only make it seem more 
sinister to states BUch as Oman and North Yemen, with which South Yemen 
has long-standing quarrels. Relations with both Syria and Iraq are cool, Egypt 
has administered a resounding slap in the face, and Iran is busily building up 
its armaments to resist Soviet domination of the area and prepare for the day 
when its oil reserves start giving out. 

This is :m ideal situation for China to move quietly but steadily into the Gulf, 
where its low posture and avoidance of proselytising will enable it to avoid unduly 
offending the powerful religious elements which dominate the politics of th* 1 area. 
Later on, if left-wing ideas spread through the Gulf from Iraq or South Yemen, 
( 'hiu a will he in a posit ion to ensure t li.it they are not the exclusive preserve of the 
Soviet Union and its agents. And if revolutions eventually overtake the princely 



105 

families which are now so well entrenched, China will he there, with it- well- 
established revolutionary credentials, to welcome the new states into the "anti- 
hegemonist" movement. The dislike earned by the Soviets through their relative 
inability to bridge cultural gaps in dealing with people of other races will 
China well. 

To occupy some sort of position in the Gulf is important, for it is West Asia's 
gateway to the Indian Ocean, as well as being the key t>> the price <>f < nergy and 
hence the economic stability of the Western world, China's new ally. However, 
Peking can have no illusions about the extent of its influence cither in lie- .Middle 
East or in Africa for the foreseeable future. These two regions — the most crucial 
single arena of world confrontation today — together account for Western Europe's 
most important sources of imported minerals, and lines of global communication. 
China and the United States alike regard the security of Western Euro] 
essential to their own. But much as China would like to help safeguard Africa and 
the Middle East against further Soviet penetration, there is in practice little it 
can do. 

It is unfortunate for China that geography alone isolates it from the part of 
the world where the biggest issues of the day are being decided. In addition, the 
Chinese have had little historic contact with the peoples of the area, and are 
fairly ignorant of their creeds and customs. Chinese diplomats are still insufficiently 
trained even in English and French, let alone Arabic or Portuguese. 

China's best ally is the Soviet Union's own over-involvement, which time and 
again results in humiliating defeats, such as that suffered by Moscow in Egypt. 
But the Soviet discovery of Cuba as anally in its expansionist process has brought 
a new and menacing element into the equation. It enables the Soviets to keep 
themselves relatively pure of the taint of military intervention overseas ; it saves 
them arousing domestic discontent by wasting their young men in debilitating 
wars in hot climates; and it makes Cuba work for the aid which still has to be 
poured in to keep its economy going. 

China regards this as a qualitatively new form of imperialism, Just as Lenin 
saw capitalism as breeding imperialism and colonialism, the Chinese see "social 
imperialism" as breeding Cubas and Vietnams and Angolas. The principle is 
simple: find a small or new country with a revolutionary movement, aid its 
revolution, egg it on into conflict with its neighbours, then ensnare it in debts 
and political ties. Whereas Soviet expansionism of the old, creeping variety has 
come up against Western resolve in such places as the Middle East, this new, 
more random style (called "dominationism" by the Chinese) has scored some 
interesting successes. 

One of these has been in Vietnam, and China, seeing its enemy's guns brought 
almost literally into its own backyard, has been forced to devise a counter strategy. 
In this case it is the alliance with Cambodia, which not only divdies Vietnam's 
resources between two fronts, but also tars the Vietnamese with the brush of bully- 
ing, which might otherwise have splashed China. This is not a new move in Chinese 
foreign strategy: faced with Indian hostility in the 1960s, Peking compensated by 
cementing its friendship with Pakistan. When Mongolia joined the Soviet Union in 
the Sino-Soviet dispute, China found allies waiting in the Balkans. 

On the broadest possible plane, China seeks to break out of Soviet encirclement 
by reaching towards the United States, Japan and Western Europe. Not sur- 
prisingly, this means that foreign policy must be de-ideologised, or rationalised 
with a new ideology so obvious tailored to fit the needs of the situation that it 
barely qualifies as Marxist and more. Although welcome in the Western world, the 
increasingly non-ideological character of Chinese foreign policy might, one would 
have thought, bring difficulties in Peking's relations with some of the more ideo- 
logically-inclined countries of the Third World. So, far however, Albania is the 
only country apart from Cuba which has taken ideology as the pretext for a break 
with China. 

In the Third World as a whole, China has been unexpectedly successful in 
persuading smaller powers that it does not seek to impose its own ideology on 
them. The Chinese have gained much credit in their aid programme for simply 
doing the job quietly, then packing up and leaving unless specifically asked to 
stay on. This reputation will serve them well in places like the Gulf, where reli- 
gion — or in other places, nationalism or tribalism — take the place of ideology and 
would resist being displaced. 

None of this solves the basic weakness of Chinese foreign policy caused by 
its defensive nature. Most modern states are either acqusitive of territory and 
resources, or are grimly hanging on to what is left from past empires and spheres 



106 

of influence. Even the poorest country of the Third World can usually afford a 
protracted feud with its neighbour. To aim primarily at security and 'mounting 
prosperity within one's borders, without exercising domination over any other 
state, seems almost quaintly idealistic, and inviting predatory attacks. Yet with 
certain aberrations, such as its attempts to dominate Vietnam and its absorption 
of Tibet, Chinese foreign policy in the past has generally been based on this 
quietist approach. That is has been so is not a tribute to any mystically peaceable 
element in the Chinese character, but to the abundance of resources within the 
Chinese empire, which made foreign conquests unnecessary except for the securing 
of the wilder frontiers. 

Now,, however, half the world is a wild frontier from China's point of view, and 
the nation's security can no longer be planned in terms of a genteel debate at the 
imperial court, followed by an indecisive expedition against the barbarians. The 
problem is that China has not yet evolved any truly effective alternative. 



[From the Los Angeles Times, July 16, 197S] 

China Reported Willing To Talk with Taiwan 

(By Linda Mathews, Times staff writer) 

Hong Kong. — China's leaders are willing to negotiate directly with the Na- 
tionalist Chinese about the future of Taiwan and the question of reunification, an 
American congressional delegation reported here Saturday. 

Representative Lester L. Wolff (D-N.Y.), leader of the delegation, which just 
concluded a 10-day tour of the mainland, said Communist Party Vice Chairman 
Teng Hsiao-ping and other Chinese policy makers repeatedly raised the possibility 
that the long-standing differences between the two regimes could be settled at the 
bargaining table. 

Wolff said Chinese officials reminded the visiting congressmen that the Com- 
munist Party had cooperated with the Nationalists twice before, first in a campaign 
against the warlords of the 1920's and then against the Japanese invaders in the 
1930s and 1940s. 

"They said they saw no reason those precedents could not be repeated." Wolff 
said. 

The statements attributed to Teng and other high Chinese officials appear to 
be the most conciliatory Peking has made toward Taiwan President Chiang Ching- 
kuo's government in recent years. Direct negotiations between the two sides 
remain unlikely, however, given Chiang's adamant refusal to sit down with the 
Communists. 

Chiang, the son of the late Generalissimo Chiang Kai-shek, dramatically an- 
nounced last year that the Nationalist Chinese would have no contact with Peking 
except "in the shape of a bullet." Other Taiwan officials, less ideological than 
their president, have expressed fear that the merest suggestion of rapprochement 
with the mainland would disturb investor confidence in their booming economy. 

Chiang's tough stance is well known in this region, so the mainland leadership's 
newly expressed interest in negotiations primarily may represent a bid to portraj' 
him in a bad light and swing American public opinion to Peking's favor. 

Even though they supposedly seek a peaceful resolution of the Taiwan problem, 
the Chinese made it clear that they did not "rule out by any means the use of 
force in liberating Taiwan, if that should become necessary," Wolff said at a 
press conference. 

The Peking officials also gave no sign of retreat from their often-stated position 

that, before full diplomatic relations can be forged with Washington, the United 

must sevt'v its diplomatic relations with Taiwan, cancel its mutual defense 

treaty with the Chiang government and withdraw the 1,000 American troops 

stationed on the island. 

The Carter administration has refused to take such steps without at least a 
tacit promise from Peking that it will not recapture Taiwan byforce should the 
United States withdraw. China has balked at the White House demand, though 
the statements to the visiting congressmen may have been calculated to persuade 
Congress and the American public that China has no immediate belligerent designs 

on Taiwan. 

"China's present leaders seem to be much more clued into the realities of Ameri- 
can politics and the widespread American concern about the future of Taiwan," 
a diplomat lare observed after the press conference. 



107 

Only a year ago, two American journalists who asked China's Foreign Ministry 
about reconciliation with Taiwan were lectured aboul th»- "unforgiveable crimes 
committed by the Nationalists before they fled the mainland in 1949. Senior 
Vice Foreign Minister Yu Chan, a Peking hardliner, -aid then that Chiang owed 
the people of China "blood debts" because of the many massacres <>f Communists 
carried out by his father. Chiang Kai-shek. 

Wolff, who heard similar anti-Taiwan diatribes on a visil to China two years 
ago, said such rhetoric was conspicuously absent this time. He attributed the 
change to a "new realism in China, on the part of her people and leadership, 
concerning both dome-tie and foreign policy questions." 

The nine-man congressional delegation found in Peking "an emerging emphasis 
on seeking ways to settle the Taiwan question on a bilateral-basis, let ween the 
Chinese (governments) themselves, in ways acceptable to both parties," said 
Wolff, who is chairman of the Asian and Pacific Affairs Subcommittee of the 
House International Relations Committee. 

The legislators said the desire for negotiations with Taiwan seemed to be wide- 
spread in Peking's top ranks. Conciliatory statements were "volunteered by many 
people we spoke to * * * at several points in our discussions," Wolff said. 



[From the South China Morning Post, July 16, 197S] 

Peking Set for Taiwan Talks 

(By Dennis Phillips) 

Peking leaders are willing to discuss differences with Kuomintang officials 
concerning Taiwan, the senior Vice-Premier, Mr. Teng Hsiao-ping, told a group 
of American Congressmen during their visit to China last week. 

Top-ranking Chinese officials pointed to historical precedents for Chinese 
Communist Party-Kuomintang co-operation; first during the time of Dr. Sun 
Yat-sen and the Northern Expedition and again against the Japanese during 
World War II. 

"They see no reason why history cannot be repeated," the Chairman of the 
House of Representatives Subcommittee on Asian and Pacific Affairs, Mr. Lester 
Wolff, said yesterday at a press conference. 

The apparent new sign of flexibility within the Chinese leadership was seen as a 
reaction to growing Soviet influence in Vietnam and what is perceived as the 
growing Soviet threat to their security. 

Vietnam was referred to as the Soviet Union's "Asian Cuba," Mr. Wolff said. 

"When coupled with repeated instances of our delegation being told that the 
Chinese recognise what were termed the realities of the U.S. involvement with 
Taiwan, our delegation emerged from the People's Republic with a definite sense 
of the sobering effects of the very real strategic and political problems facing 
China in the form of the Soviet Union * * * and Vietnam," Mr. Wolff said in a 
prepared statement. 

China's willingness to cooperate with Taiwan was mentioned several times dur- 
ing a discussion with Mr. Teng and the President of the People's Institute for 
Foreign Affairs, Mr. Hao Te-ching. 

"In this regard, the delegation sensed a growing Chinese willingness to discuss 
Taiwan's future on the basis of existing realities," Mr. Wolff said. 

The Congressmen would not comment on possible U.S. Government action to 
encourage such a dialogue between Peking and Taipei, saying it is an internal 
matter for the Chinese to work out. 

Mr. Wolff said the discussion of Taiwan was in sharp contrast to a previous 
meeting he had with Chinese leaders two years ago. 

"There was none of the rhetoric we'd heard before of the 'murderers on Taiwan' 
and what have you. 

"Taiwan was mentioned in a much more conciliatory framework," he said. 

The Chinese seemed "harder on the gang of four than on the leaders of 
Taiwan," Mr. Wolff said. 

The Chinese made it clear the mainland-Taiwan issue is something for them to 
settle, without any outside interference. 

"There was a strong admonition that this does not rule out the ultimate use of 
force, if necessary, to reunite the mainland and Taiwan," Mr. Wolff said. 



108 

The willingness to discuss the Taiwan issue with the Congressmen during 
their lO-da}^ trip was described as "a sense of 'new realism' in China" by Mr. 
Wolff. 

The "realism" seems based on a recognition of U.S. interests in Taiwan, as well 
as a willingness to co-operate with the U.S. as a potential ally against a growing 
Soviet influence in Asia, he said. 

"They indicated Vietnam was strongly controlled by the Soviets and the Soviets 
are using Vietnam's defence facilities," Mr. Wolff said. 

He said the Chinese feeling towards Vietnam was "not one of fear, but one of 
great concern." 

Mr. Wolff said China referred to the "Soviet encirclement plan," and pointed 
out China had been encircled many times in the past, but had always broken 
through. 

Mr. Wolff said the Chinese indicated that if the U.S. continues to sell fighter 
planes to Taiwan "it would interfere with a negotiated settlement of the Taiwan 
issue and retard normalisation." 

On other matters, Mr. Wolff, who also serves as Chairman of the House Select 
Committee on Narcotics Abuse and Control, said there is no validity to accusa- 
tions that China is behind Asia's drug trade. 



[From United Press International, July 16, 197S] 
Wolff: Peking Attuned to Taiwan Negotiations 
"sense of new realism" 

Hong Kong. — The leader of an American Congressional mission to Communist 
China said Saturday members of the group "sensed a new realism" by Chinese 
leaders toward the thorny Taiwan issue. 

"In this regard, the delegation sensed a growing Chinese willingness to discuss 
Taiwan's future with the Kuomintang on the basis of existing realities," said 
Representative Lester L. W^olff, a New York Democrat, at a news conference. 

Wolff, chairman of the House Subcommittee on Asian and Pacific Affairs, and 
eight other congressmen spent 10 days in China talking with Peking officials. 
Among those was Teng Hsiao-ping, vice premier and vice chairman of the Chinese 
Communist Party. This was Wolff's second visit to China. 

He said that the "new realism" applied to both domestic and foreign policy 
but it was on the question or Taiwan that it was "potentially important" for the 
United States. 

The reason for the changing Chinese attitude, Wolff said, is Peking's perception 
of a Soviet threat to China. 

Wolff said the possibility of negotiations between Communist leaders in Peking 
and leaders of the Kuomintang, or Nationalist Party, in Taiwan was raised "sev- 
eral times" during the group's conversation with a "very high Chinese official." 

That official could only have been Teng Hsiao-ping, although Wolff declined 
to say so publicly. 

"In our discussion on this issue, the historical fact was raised that twice in the 
past the Chinese Communist Party and the Kuomintang have come together and 
cooperated when it was in their common interest," Wolff said. 

"When coupled with repeated instances of our delegation being told that the 
Chinese recognize what were termed the realities of the U.S. involvement with 
Taiwan, our delegation emerged from the People's Republic with a definite sense 
of the sobering effects of the very real strategic and political problem facing China 
in the form of the Soviet Union — the polar bear — and what the Chinese call the 
Soviet Union's Asian Cuba, Vietnam. 

The "high official" did not specify just how negotiations with Taiwan might 
take place, asserting that there has not been any official communication with 
Officials there, nor is there; any now. 

J Jut, Wolff quoted the Chinese official as saying, there has been cooperation 
between the Communist and Nationalist parties twice and "you cannot rule out 
a t bird time.'' 

Wolff and other members of the mission emphasized that China has not altered 
the main conditions for resolving the Taiwan issue so far as tin 1 United States is 
Concerned. Those conditions are Withdrawal of American military forces from 
Taiwan, a break in relations, and abrogation of the U.S. -Taiwan defense treaty. 



109 

Wolff, comparing this visit with his first trip two years ago, said tho "new 
realism" was apparent everywhere the group went in the relaxed atmosphere, 
reduced ideological rhetoric and flourishing of new ideas that relate less to the 
policies of the late Chairman Mao Tse-tung. 

Other members of the delegation included J. Herbert Burke (R.-Fla.), Eligiode 
la Garza (D.-Texas), Billy Lee Evans (D.-Ga.), L. H. FountaiE (D.-N.C), 
C. Tennyson Guyer (R.-Oreg.), Charles B. Rangel (D.-N.Y.), James R. Mann 
(D.-S.C), and Larry Winn, Jr. (R.-Kans.). 

The group returned from China, last Thursday and was to leave for the United 
States Saturday afternoon. Before the news conference, the delegation had a 
breakfast meeting with members of the American Chamber of Commerce in 
Hong Kong. 

[From the Hong Kong Standard, July 16, 19781 

A Peking, KMT Deal? 

(By Chris Yip) 

A "new realism," although force is not ruled out 

China is willing to settle the Taiwan issue with the Kuomintang regime on a 
bilateral basis between themselves, according to the leader of an American dele- 
gation of Congress representatives, Lester Wolff. 

The United States, he said, would not be involved. 

High-ranking Chinese officials have cited two historic occasions when the 
Communist Party and the Kuomintang cooperated when it served their mutual 
purpose. The first was during the era of Dr. Sen Yat-sen and the Northern 
Expedition, and the second towards liberation during World War Two. 

The Chinese are not ruling out a repeat of history for a third time, Mr. Wolff, 
chairman of the American Subcommittee on Asian and Pacific Affairs, claimed 
yesterday. 

Mr. Wolff led the congress delegation during a 10 day tour of China. 

He said the question of China-Taiwan rapprochement was brought up by the 
Chinese in response to a question by another member of the delegation. 

"It was raised several times in a single conversation, once in response to ques- 
tions by Mr. de la Garza (of the International Affairs Subcommittee) and the 
others raised voluntarily and independently," Mr. Wolff added. 

He declined to divulge the names of the Chinese officials making the remarks 
apart from saying that they were ' 'high-ranking." 

The Chinese did not, however, rule out the alternative use of force, if necessary 
to reunite the Chinese mainland and Taiwan. 

Describing himself as a "student of China" Mr. Wolff said: "Certainly no 
visit of 10 days qualifies any group as expert on the policies or events of another 
nation." 

But members of the mission were agreed on what it considered to be certain 
trends in the country which would bear close study in the weeks and months to 
come, Mr. Wolff said. 

There had emerged a "new realism" in China, on the part of its people and 
leadership, concerning both domestic and foreign questions facing China at the 
present time, he added. 

"One area where we sensed a potentially important example of the new 
realism would appear to be on the question of Taiwan." Mr. Wolff told an as- 
sembled press conference. 

"When coupled with repeated instances of our delegation being told that the 
Chinese recognise what were termed the realities of the U.S. involvement with 
Taiwan, our delegation emerged from China with a definite sense of the sobering 
effects of the very real strategic and political problems facing China in the form 
of the Soviet Union — the 'Polar Bear' — and what the Chinese call the Soviet 
Union's 'Asian Cuba', Vietnam," Mr. Wolff said. 

This perception of China's "new reality" was reinforced by the delegation's 
visits to educational facilities, cultural institutions and factories alike. 

The new realism is leading the Chinese to be receptive to American technology 
and expertise to help them overcome the lost decade of the cultural resolution 
and the so-called "Gang of Four", he said. 

The country is no longer adverse to making use of the best from other nations, 
while the Chinese remain determined to pursue self-reliance. 



110 

The Chinese conflict with the Soviet? was not seen as just part of an ideologica 
battle between two Communist nations, but was perceived as an effort by the 
U.S.S.R. to dominate the entire world, Mr. Wolff said. 

The rhetoric which so pervaded during Mr. Wolff's last visit to China two years 
ago was little heard of, he added. 

The delegation had met with many Chinese officials, including Senior Vice 
Premier Teng Hsiao-ping. 



[From the Times of London, Sept. 29, 1978] 

"US: Peking Prepared to Make Taiwan Concessions, Washington 

Believes" 

(By David Bonavia) 

A series of hints and signals from Peking suggests that the Chinese leadership 
is prepared to make certain concession?: to the United States over the issue of 
Taiwan. The intention evidently is to follow the recent peace treaty between 
China and Japan with a new diplomatic coup to block Soviet global expansion. 

The first big hint came three months ago when a United States congressional 
group led by Mr. Lester D. Wolff was told by Air. Teng Hsiao-ping, the vice- 
chairman, that the Chinese Communist Party had in the past twice succeeded 
in collaborating with the Kuomintang (nationalists) and could possibly do so 
again. This remark was later repeated by Mr. Li Hsien-nien, co-vice-chairman, 
to a Japanese visitor. 

There have been other signals since then. During the recent opening of diplo- 
matic relations between China and Libya, Peking for the first time did not insist 
on a specific statement that it is the only capital of all China. This should not be 
taken to mean any abandonment of Peking's claim to sovereignty over Taiwan — - 
only a willingness not to labour the issue. 

In further concessions, Thai International is expected to be allowed to continue 
flying to Taipai even after starting its new service to Peking. This is an advance 
over the arrangement with the Japanese, who had to rename an airline and go on 
using the old airport of Haneda for their Taiwan flights, even after the opening 
of the new airport at Narita. 

In Britain's case, the links between the Hongkong-based airline Cathay Pacific 
and Taiwan have so far stood in the way of an agreement to let British Airways 
fly to Peking. 

Apart from continued aviation access to Taiwan, what could Peking offer the 
United States in return for rapid moves towards the establishment of a fully- 
fledged American embassy in Peking? China is still adamant on its three demands 
that Washington must break diplomatic links with Taipei, cancel its defence 
agreement and withdraw its forces. 

What has worried the Americans most is that if they did this, and Peking 
then decided to invade and "liberate" Taiwan, America's prestige and credibility 
around the world would suffer yet another blow. Taiwan has many friends in 
America, who view agreements with the Chinese Communists as a national 
sell-out. 

To forestall the possibility of an invasion — which the Chinese say they still 
retain as an option at their own discretion — it has been proposed that recognition 
of Peking should be accompanied by a, unilateral statement on the part of the 
United States president that America retains an interest in the keeping of the 
peace in the Taiwan Strait, or some Mich formula. 

Now it looks as though the Chinese might be prepared to let the United States 
go on trading actively with Taiwan and maintaining cultural and other links 
(diplomats for the United States liaison office in Peking are still mostly language- 
trained in Taiwan). 

There might also be a tacit Chinese agreement to stop talking about the "lib- 
eration" of Taiwan by force, and perhaps a secret assurance thai this was not 
Peking's intention. Such an operation 18 almost impossible militarily anyway, 
considering China's security problems with Vietnam and the Soviet Union, ami 
the strong air force whirh i lie Americans propose to leave* behind in Taiwan. 

Recent unofficial reports from \\ ashington have suggested t hat President ( Sarter 
may be aiming at normalization early next year, and that an agreement to this 
effect was reached during last May's Peking "trip by Mr. Zbigniew Brzezinski, the 
national security adviser. 



Ill 

If this scenario works out, the United States would probably b 
desist from making any unilal sral statement about peace and □ the area, 

which the Chinese see as an interference in their internal affairs. 

The Taiwan regime is becoming increasingly nervous, as it- last diplomatic 
partners fall away. Saudi Arabia, onei n recent years, is th 

likely to follow Libya in establishing relations with Peking, while maintaining 
fairly strong economic links with Taiwan. 

Although the attitude; of Taiwan officialdom is as rigid as ever, there ai 
doubtedly people there who beli rve it would be advantageous to follow up the Pe- 
king leaders' offer of fresh talks. While China is so anxious to solve the problem 
soon, it is possible Taipei would get better terms for itself, as souk- kind of auton- 
omous part of China, than in the future when attitudes may harden again. 

Why should Peking be so apparently keen to solve the Taiwan problem now 
when it has not budged an inch over it since the signing of the famous Shanghai 
communique with Mr. Richard Nixon in 1972? 

Trade, technology and military needs seem to be the answer. The Peking leader- 
ship is embarked on a programme of economic and technological growth SO ambi- 
tious that it will be held back seriously if the United States, th'- powerhouse of 
world capital and technology, continues to be excluded. 

Chinese educational authorities have already suggested the sending of hum 
of students to America to learn, as their forefathers did, the mo-t advanced science 
and technology. Sending students to Europe and Japan is a partial substitute, but 
it is America that Peking really has its eye on. 

Fresh purchases of American grain, for the first time in two or three years, may 
signal Chinese willingness to trade on a large scale with the citadel of capitalism, 
and it is even likely that American oil companies will soon be invited to help to 
explore for petroleum resources off the Chinese coast. 

Most important of all, China cannot buy all the advanced weapons systems it 
wants from the West if the United States opposes such sales. 



[From the Christian Science Monitor, Oct. 26, 1978] 

Two Chinas Muffle Hostility? 

(By Daniel Southerland) 

China watchers are looking forward to an event that amounts to another 
potentially positive sign for United States-China relations. 

Ten Chinese from Communist China and one from Taiwan are expected to 
attend the same scientific conference in San Francisco starting Oct. 29. In the past, 
one side or the other has refused to participate in any conference attended by its 
adversary. A major change occurred two months ago when delegates from the 
two Chinas showed up at a scientific conference in Tokyo. 

The San Francisco conference, which is the annual meeting of the Society of 
Exploration Geophycisists, will mark the first occasion on which both sides have 
attended a conference in the United States. Peking's delegation will be led by 
Chin Tsu-jung. vice-director of the Geophysicl Research Institute of the China 
National Oil and Gas Exploration and Development Corporation. Taiwan will be 
represented by Chen Wu-shong. 

SIGNS OF FLEXIBILITY? 

American experts on China are constantly looking for sio-ns of whether Peking 
is willing to be more accommodating on the question of Taiwan. It is this key 
question which has delayed the establishment of full diplomatic ties between the 
United States and China. 

U.S. officials view Peking's willingness to attend conferences at which Taiwan 
delegates are present as another sign of China's growing pragmatism and as a part 
of its current "united front" campaign to woo Taiwan. 

But U.S. China watchers are cautious about all this. They do not see any sign 
that Peking has modified any of the principles it holds to on the Taiwan issue. 
The change has been more a matter of tactics. U.S. officials also point out that 
Peking has yet to talk publicly about a "peaceful resolution" or "peaceful re- 
unification" with Taiwan, something which it had done in 1973 during a previous 
united front campaign. 



112 

A WORD OF CAUTION 

American officials thus caution against high expectations for full normalization 
of relations with Peking any time soon. They believe expectations were raised 
much too high after the initial opening to China and there was a distinct "letdown" 
on both sides in 1974. 

There has been much speculation on the subject of normalization recentty, with 
some observers predicting that President Carter will make a forceful move in that 
direction after next month's congressional elections. The President makes it clear 
that he considers normalization of U.S.-China relations one of his top international 
goals, and Mr. Carter's recent success at Camp David would appear to place him 
in a better political position to move on the China issue. 

But the U.S. is still seeking a formula on the Taiwan question which would be 
acceptable to Peking but which would also guarantee the security of Taiwan. 
Peking has yet to renounce the possible use of military force to "liberate" Taiwan, 
to which the U.S. has defense treaty commitments. 

THE NEW OFFENSIVE 

In the meantime, U.S. officials are intrigued by what they call Peking's "smiling 
offensive" toward the West and toward Taiwan. 

Peking is wooing the West through ever increasing numbers of visitors to China. 
A record number of four U.S. congressional delegations, including a total of 35 to 
40 senators and congressmen, are expected to visit China during the current 
congressional recess. Travelers to China report that the flow of visitors is such that 
hotel accommodations are severely taxed. 

A recent congressional delegation led by Rep. Lester Wolff (D) of New York is 
preparing a report which will quote high-level Chinese officials as saying that 
there had been two previous occasions when they had cooperated with the Chinese 
Nationalists in united front-type arrangements and that they "would not rule 
out" a third occasion when they might cooperate with the Nationalists on Taiwan. 

Some observers interpret this as a sign of Peking's "flexibility" on the Taiwan 
issue, but the Chinese Nationalists have not shown any signs, in public at least, 
of responding to such gestures from Peking. 



APPENDIX E 



PRC "Defense White Paper" 1 

Peking, July 30. — We are greeting the glorious festive day of the PLA's founding 
anniversary in the excellent situation of winning significant victories in grasping 
the key link and running the country well. 

Combining the universal truth of Marxism-Leninism with the concrete practice 
of the Chinese revolution, the great leader and teacher Chairman' Mao blazed a 
new path of encircling the cities from the countryside and seizing political power 
by armed force. 

At the critical moment of our defeat in the first revolutionary civil war, Chairman 
Mao and his close comrades-in-arms, Premier Chou En-lai and NPC Standing 
Committee Chairman Chu and other proletarian revolutionaries of the elder 
generation, founded this heroic army of the proletariat and, at another critical 
moment in the Chinese revolution as a result of Wang Wing's erroneous line, led 
us in the w T orld-shaking Long March. The victory of the Long March laid the 
foundation for defeating the Japanese aggressors, burying the Chiang family 
dynasty and founding the new China. Now T the party Central Committee headed 
by wise leader Chairman Hua, after scoring the historical victory of smashing the 
"gang of four," has formulated the general task for the new period and is leading 
us on a new Long March. This is another monumental world-shaking heroic 
undertaking. "The Red Army fears not the trials of the Long March, holding light 
ten thousand crags and torrents." 

To celebrate the PLA's founding anniversary, we should make greater efforts 
to carry forward the glorious tradition of the then worker-peasant Red army's 
Long March and advance valiantly to realize China's Socialist modernization in 
agriculture, industry, national defense and science and technology. 

It should be noted that our new Long March is being carried out in an inter- 
national atmosphere of great disquietude. Building our country into a modernized 
Socialist power pleases the people but frightens our enemy. That vicious enemy 
who has not given up its ambition to subjugate China will certainly resort to all 
possible means to undermine it, and it is possible that it might resort to war. In 
an incisive analysis of the international situation, Chairman Hua has clearly 
pointed out: "The factors for war. The danger of a world war is growing menace 
to the people of the world" and called on us to "maintain a high level of vigilance 
and be prepared against a war of aggression launched by the superpower.-." We 
must hold aloft the great banner of Chairman Mao and, under the wise leadership 
of the party Central Committee headed by Chairman Hua, implement the line 
of the 11th CCP National Congress, the general task of the new period and the 
policy and tasks of grasping the key link and running the army well and being 
ready to fight formulated by the Military Commission meeting. We must race 
against the enemy for time and speed, strive to do a good job in preparedness 
against war and always be ready to smash social imperialism and imperialism 
in any aggressive war they might unleash. 

A question that worries the people of all countries is whether a third world 
war will break out. There was an interval of only 21 years between World War I 
and World War II. Since the end of World War II, there has been no world war 
in the ensuing 33 years. Although there have been incessant small wars and local 
wars of a comparatively large scale. How long will this situation last? Can a 
new world war be averted after all? World opinion varies on this question. The 
Soviet revisionists allege that "detente has become a secure and irresistible 
course" and that "conditions exist for negating the inevitability of war," while 
U.S. imperialism claims that a Soviet-U.S. agreement on limiting strategic arms 



3 Article by Hsu Hsiang-chien : "Heighten Vigilance, Be Ready to Fight," published in 
Red Flag No. 81. 

(113) 



114 

will avert a world war. All this is humbug. Western appeasers believe that com- 
promising with, making concessions to and appeasing the Soviet Union will 
enable them to attain peace through begging. Others believe that both the Soviet 
Union and the United States have nuclear weapons, that each is afraid of the 
other and that so long as the nuclear balance is not tipped, war might be averted. 
The Marxist viewpoint is fundamentally different. We hold that in a class 
society, war is a phenomena between two periods of peace. War is the continua- 
tion of politics and also the continuation of peace. A new world war can only be 
delayed, but it is inevitable. The people of our country and the whole world 
cherish peace and oppose war. The longer the peaceful international environment 
is preserved, the better it is for the people of all countries. However, as Lenin 
once described it, the present remains an era of imperialism and proletarian 
revolution. Imperialism and social-imperialism exist in this world, and so long 
as those social systems remain unchanged war is inevitable. The two superpowers, 
the Soviet Union and the United States, are both seeking world hegemony. Soviet 
social-imperialism in particular is desperately contending for world hegemony 
and has become the root cause of the further sharpening of all kinds of basic 
contradictions in the contemporary world as well as the root cause of the world's 
unrest. The two superpowers, the Soviet Union and the United States, are locked 
in a fierce struggle for hegemony, and as a result, World War III will break out 
one day. We have noted this point on a number of occasions. Is it because we 
like war? No, we are resolutely opposed to war. Opposition to a new world war is 
embodied in our nation's constitution. However, the danger of war stands out 
as an objective reality. By looking at it squarely and emphasizing it, we want to 
enable people to maintain a high state of vigilance against a new world war and 
strive to put off the outbreak of war. Once war breaks out, we should form the 
broadest global united front possible to deal a fatal blow to the one who unleashed 
the war. 

The international situation has undergone tremendous changes in the 33 years 
since the war ended. Countries want independence, nations want liberation and 
people want revolution. This has become an irresistible historical trend. U.S. 
imperialism has slipped rapidly from its hegemonic position in the capitalist 
world, while the Soviet Union has changed from a socialist country to a social- 
imperialist country. The imperialist camp is split and disintegrated, the socialist 
camp no longer exists. The contention by the two superpowers, the Soviet Union 
and the United States, for world hegemony and the struggle by the world's 
people against them have become the center of activities in current world politics. 
Having scientifically analyzed the new changes in the international class struggle, 
Chairman Mao put forth the great three worlds theory in which he denned the 
principal revolutionary force, the middle force that can be won over and rallied, 
and the principal enemy, thereby further exposing the nature of Soviet social- 
imperialism, pointing out the danger of a new world war and charting a course 
e people of the whole world in their struggle against the hegemonic powers, 
particularly Soviet social-imperialism. 

The Soviet social system has changed and so has its policies. This is reflected 
in its foreign relations, in which it vigorously pushes hegemonism and expansion- 
ism. The Soviet Union is an up-and-coming imperialism. While its economy is 
based on highly concentrated state monopoly capitalism, its economic strength 
tt incompatible with it, and thus it has to primarily rely on its military 
might and threats of war to engage in expansionism. The Soviet Union has set 
up a fascist dictatorship, thereby making il easier to militarize its entire national 
economy and state machinery. It has totally inherited the reactionary mantle of 
the old tsars while simultaneously cloaking itself in socialism. It is therefore 
avaricious, adventurous and deceitful in nature. With the role of the United States 
, the hands of the Soviet Union are reaching out farther and farther, 
thereby becoming a source of world war far more dangerous than the United 
Stal 

The strategic goal of Soviet social-imperialism is to seek world hegemony. It 

t ambition, namely, "intending to seize all of Europe, Asia and 

' Regarding tic United States as its opponent, it has resorted to political, 

economic and military measures to engage in a tierce rivalry for world hegemony. 

Ii c0 ] I urope :i key area for contention, and it. has thus deployed more than 

of it> military strength in Europe proper and Eastern Europe to 

m Europe and pose a threat to Western Europe. Taking advantage 

European countries, it has stepped up 
oj crushinj them om by on*, 1; has amassed a large number of warships 



115 

in the southern and northern Btraits of Europe in order to encircle Western Europe. 
Its northern and Baltic Sea fleets constantly -end fighting ships on cruises in the 
Atlantic Ocean, and its Black Sea Fleet often appears in the Mediterranean to 
display its power, in a vain attempt to cut oil" contact between Western Europe 
and the United States in wartime. In order to outflank Europe and Bubdue tne 
West European countries without attacking them, it has made desperate efforts 
to contend for the Middle East, Africa and the ( rulf area, seize important Btrafc gic 
positions, seek domination of the sea, foster and aid pro-Soviet forces, subvert 
sovereign states and rob energy resources. Of Late, the Soviet Union has even 
quickened its pace of aggression arid expansion by hook or by crook, and in a 
more violent, flagrant way. In Africa, it has incited one country againsl th< other, 
created incidents, provoked war everywhere and sent Cuban mer bo pull 

its chestnuts out of the fire. Cuba has become the Soviet Union's satellite and 
accomplice, as well as a Soviet agent in wrecking the nonalined movement. In the 
south Asian and Red Sea regions, it has resorted to the most cruel and vicious 
tactics to direct and support certain pro-Soviet forces to engage in assassination 
and subversion and incite coup d'etats. It has even dispatched its military per- 
sonnel to these regions to participate in the engineering of bloody incidents so as 
to facilitate its southward advance toward ice-free ports. In Southeast Asia, it 
has encouraged and aided that Vietnamese authority which pursues regional 
hegemonism to provoke incidents everywhere, launch armed aggression aj 
Kampuchea and serve as a Cuba in the East. Is there any region where a change 
is taking place or a disturbance is going on where the evil shadow of Soviet social- 
imperialism does not loom? It is because of its wild attacks that the danger of a 
world war is obviously increasing. 

In order to realize its ambition of seeking world hegemony by force, the Soviet 
Union is locked in an arms race with the Tinted States on an unprecedented scale 
and at unprecedented speed. In the past few years, its military expenditures have 
reached more than $100 billion a year which, added to its other expenses allocated 
for military purposes, account for 20 percent of its gross national product. The 
number of its troops in combat readiness has increased from 3 million to more 
than 4/million. In addition, it has stored nuclear weapons equivalent to some 10 
billion Tons of TNT, produced several dozen thousand tanks and built up an offen- 
sive naval fleet capable of fighting on the high seas. At present, the Soviet Union 
possesses almost an equal number of strategic weapons as the United States, but 
its conventional weapons surpass the combined number of those possessed by the 
United States and the West European countries. It has therefore become a super- 
military power. Atomic bombs and guided missiles are not bread and butter, and 
aircraft, warships, tanks and cannons cannot be regarded as goulash. They are 
not things you can eat or wear and their accumulation is for no purpose other 
than to tight a world war. Is it for "self-defense? " Or for good appearance? The 
new Soviet tsars are on the back of an unbridled horse of arms expansion and war 
preparation moving from post to pillar and from pillar to post. At a certain time, 
they will itch for action. This is independent of man's will. 

The Soviet Union and the United States have both taken offensive and de- 
fensive steps in their global rivalry, but the former is mainly in an offensive pos- 
ture while the latter is in a defensive posture. In contending for each and every 
place, the Soviet Union invariably seeks to seize a piece of meat off the U.S. plate. 
Ambitious and covetous as it is, can the Soviet Union stop without having seized 
all the meat off the U.S. plate? Meanwhile, the United States is still powerful to 
a certain degree, but will it let the things it has already seized be robbed by others? 
Chairman Mao said: "The United States wants to protect its interests in the 
world and the Soviet Union wants to expand; and this can in no way be changed." 
The contradiction between the Soviet Union and the United States is irreconcil- 
able and their contention is bound to continue. Lenin had a famous saying: "The 
content of imperialist politics is 'world domination' and the continuation of these 
politics is imperialist war." Today, only the Soviet Union and the United States 
want to and are qualified to fight a world war. It will either be the Soviet Union 
or the United States that ignites the spark of war, and the danger comes mainly 
from the arctic bear. Brezhnev and his ilk have asserted that "a world war is no 
longer unavoidable." How can these Hitlerian lies cover up cruel reality! 

A new world war is inevitable. We say this in terms of a law or a tendency and 
by no means indicating that war is imminent and will be fought very soon. At 
present, both hegemonic powers, the Soviet Union and the United States, have 
their own weaknesses and problems. By nature, Soviet social-imperalism, is weak 
and its ambition far exceeds its strength. Its aggressive and expansionist activities 



116 

have often met with frustration, and its global strategic plan for launching a world 
war is yet to be completed. Beset with growing crises, the United States is also 
finding the going tougher and tougher with each passing day. As long as we act 
in accordance with Chairman Mao's great theory of differentiating the three 
worlds to unite with the Third World, win over the second world, form an ex- 
tensive international united front against the two hegemonic powers, the Soviet 
Union and the United States, and lay emphasis on exposing and attacking the 
aggressive and war policies pursued by Soviet social-imperialism, it is possible to 
delay the outbreak of war. 

Social-imperialism and imperialism only pay attention to positions of strength. 
They will bully you if you are weak but be afraid of you if you are strong. To 
cope with their counterrevolutionary policy of strength, we must carry out a 
revolutionary policy of strength. Soviet social-imperialism is filled with arrogance 
by virtue of its certain superiority in weaponry and equipment. However, it 
will stop and think provided the people of all countries strengthen their own defen- 
sive capabilities, make earnest efforts to insure their preparedness against war and 
vigorously increase their strength against wars of aggression. We will be in an 
advantageous position even if Soviet social-imperialism becomes so mad as to 
provoke a war in disregard of all the consequences. 

In launching a global war, social-imperialism and imperialism must establish 
certain naval and air bases and seize and occupy certain ke}- strategic positions 
in various places throughout the world. In order to delay the outbreak of war, 
we must stand on the side of the people throughout the world and make earnest 
efforts to disrupt the global strategic deployment of the two hegemonic powers, 
the Soviet Union in particular. Wherever the Soviet Union is making trouble, 
we should help and aid the people there so they can carry out a resolute struggle 
against it. We should cut off the Soviet Union's claws wherever they stretch. The 
more resolute the struggle we wage and the stronger the attack we make, we will- 
be better able to throw into confusion the Soviet Union's timetable for launching 
a war. 

Appeasement is the catalyst of war. To postpone the outbreak of war it is 
ary to oppose appeasement of the Soviet Union, regardless of whether it is 
military, political or economic. The nature of Soviet social imperialism can never 
change. Its methods, tactics and means of contending for hegemon} r ma}' change, 
but not the goal of its established global stretegy. If you compromise and yield 
to it, it will demand still more, whether you sign a so-called disarmament agree- 
ment or a so-called SALT accord. The Soviets will not be bound by it. These 
accords cannot maintain a so-called "nuclear balance" or "nuclear stalemate," 
nor can they forestall any conventional war by the U.S.S.R. The attempt to divert 
the peril, the Soviet Union, eastward to China is to lift a rock only to drop it on 
one's own feet. Giving loans, grain and advanced technology to the U.S.S.R. will 
only help it overcome its economic difficulties and increase its strategic stockpile, 
and will not in the least control it. A fed bear will not change its cannibal nature. 
Why was Hitler able to initiate a war? Wasn't it because of Chamberlain, Daladier 
and their i!k that he became much stronger militarily and economically? Today, 
a trend toward appeasement is prevalent in the West. It suits the needs of the 
Soviet Union for aggression and expansion, enhances its strategic global position, 
and stimulates the growth of the factors for war. By pursuing such a policy, one 
i< sure to reap the bitter fruits of his own sowing, just like nourishing a tiger so 
thai it hecomes a source of trouble later. 

The great People's Republic of China is a formidable obstacle to Soviet social- 
imperialis] co 'cntion for world hegemony. "Soviet revisionism will never 
relinquish its ambition of subjugating China" and harl ors inveterate hatred for 
China. Tlii' Khrushchev- Brezhnev renegade clique has not only totally inherited 
the ■ '. I tsars' policy of aggression and expansion, but has gone much further. 
With malicious intentions Krnshehev proposed establishing a "joint fleet" and a 
"longwave radio station" in China, engaged in subversive activities in the Sinkiang 
area and raved about the so-called "yellow peril" in Western nations in an attempt 
to have China destroyed by other people. Even more ferocious, Brezhnev has 
I ;dl his fangs. The Soviet Union has stationed a million troops along the 
Sino-Soviet border areas and in Mongolia, has deployed offensive strategic 
weapons there, has greatly strengthened the power of its Pacific Fleet, frequently 
holdfi large-scale military exercises with the intention of invading China and has 
plotted to perforin "surgica] auclear operations" on China, posing a direct mili- 
tary threat to China. It hat Constantly intruded into China's territorial land, 
waters and airspace and created a series »>f grave incidents, including the Chenpao 



117 

Island and Tiehliekti incidents. It lias mobilized all ita propaganda machii 
incite anti-China hysteria. Nol long ago, Brezhnev personally sn< aked into ."'i 1 eria 
and tho Soviet Far East to encourage the Soviel troops and issue war cries. The 
Soviet Union has been desperately trying to foster pro-Soviel forces, Beek military 

bases and peddle the "Asian security system" in countries and areas around 
China in a wild attempt to strategically encircle China. More recently, as the 
Vietnamese authorities rabid anti-China activities have 3eriously <■■ 3ino- 

Vietnamese relations, the Soviet Union has popped up from behind the Bcei 
to fabricate lies, slander China and blatantly engage in incitement and agitation, 
fully revealing its sinister intention of encirclii • in all poe - while 

intruding into Southeast Asia, an area long-coveted by the Sovi< I . All < f 

Soviet social-imperialism's 

and threaten Japan, yet it is also making increasing eflfoi 
aggressive war against China. 

Soviet social imperialism is our chief and most dam my. We I 

with it seriously. Faced with the lofty task of ing socialist coi struction 

and realizing the four modernizations, the people of our country havi sing 

need for a peaceful environment. However, we have never feared war and will 
never beg for peace. In dealing with Soviet social imperialism, we will -till use the 
old method for dealing with all reactionaries called tit for tat. ( hairn an Mao 
has taught us: "We must be prepared to deal with surprise attacks. As 
imperialists exist in the world, there will be some idiots who, in disr< - la- 

people's opposition, will impose world war on the people. We must fully calculate 
such possibility." We must continue to assume that the enemy will start a war 
sooner than is expected. We must be prepared for a war that is bigger than ex- 
pected, for a nuclear war and for the enemy's surprise attack. We should race 
against time and do a good job in making every preparation for a war ag^i- 
aggression. 

The most fundamental things in preparing well for a war against aggression are 
holding aloft the great banner of Chairman Mao, resolutely implementing C hair- 
man Mao's thinking on military affairs, implementing the line of the 11th party 
congress and the general task for the new period, implementing the principles and 
tasks of grasping the key link and running the army well and of being prepared 
for war as decided on by the conference of the military commission, firmly grasping 
the key link of exposing and criticizing the "gang of four," grasping the key links 
in army work of "it is necessary to consolidate the army" and "prepare for 
fighting," speeding up the achievement of our country's four modernizations, 
speeding up the building of our army's revolutionization and modernization, 
doing a good job in preparing mentally and materially for fighting, and laying a 
concrete foundation for fighting a people's war under modern conditions. 

People's war is the core of the system of Chairman Mao's military thinking. 
It is a magic weapon with which to defeat the enemy and win victory and a secret 
master plan for overcoming the aggressors bequeathed to us by Chairman Mao. 
Chairman Mao said: "The army and people are the foundation of victory,'' "the 
deepest roots of the power of war lie among the people," and "mobilizing the 
ordinary citizens of the whole country means creating a vast ocean for pulling the 
enemy down under the waves, creating conditions for making up for the short- 
comings in weapons and other things and creating prerequisites for overcoming 
all difficulties in war." In the past, by relying on the people's war we have de- 
feated powerful enemies at home and abroad; in the future, we should still make 
full use of our country's vast land and population, superior system, rich, glorious 
tradition of people's war and other favorable conditions, and win victory in a 
hard, bitter and protracted people's war. 

In the future antiaggression war, our enemy's only superiority will be its slightly 
better military technology, weapons and equipment. However, its military 
theories are corrupt and reactionary, and the aggressive war they launch will be 
unjust and divorced from the people and will be fought with soldiers who are low 
in spirit and morale. Therefore, no matter what the quantity or quality of their 
weapons and equipment, their role cannot be brought into full play. The higher the 
degree of their modernization, the more they will depend on fuel, communications, 
transportation and logistics and supplies. We have a sharp weapon — Chairman 
Mao's most advanced thinking on military affairs — and weapons and equipment 
that are far better than those we had in the past. If the enemy dares to invade, 
we can rely on the principal armies and the local armies to wipe out large numbers 
of them and we can mobilize the broad masses of militiamen and people to use the 
enemy's weak points, strike at the enemy extensively and destroy its communica- 

35-200— 7S 9 



118 

tions and transportation, gas pipelines and supplies. Each of us is a fighter, every 
village is a bastion and every part of our land is a battlefield. No matter how many- 
troops they have, they will not be able to withstand our kind of blows and attri- 
tion. Did not those Westerners with some military foresight say: To attack socialist 
China is a military taboo; if one is trapped there, one can never pull out. This 
opinion is very incisive. The people's war has limitless power and great promise. 
Because of this, we are filled with confidence in victory. 

Chairman Mao has pointed out: "Marxism must become further developed and 
should develop with practice. It should not remain stagnant. If it does and main- 
tains old ways, it will be lifeless." The same is true for the theory of people's war 
which must develop in line with historical developments. We must adhere to the 
basic principle of Marxism and Mao Tse-tung thought — seeking truth from facts — 
analyze and study the practical situation, and solve practical problems by pro- 
ceeding from practical conditions. Modern war has many different characteristics 
compared with past wars. Our enemy has greatly changed and we are also very 
different from what we were in the past. This means that we must more closely 
integrate Chairman Mao's thinking on people's war with the new historic conditions, 
conscientiously study the new characteristics and laws of people's war under 
modern conditions, and do a good job of making preparations in all fields. 

The three-in-one system of combining the field armies, the regional armies and 
the militia i-; the best way to organize a people's war. The future antiaggres-ion 
war will be a large-scale people's war against the enemy who will be everywhere — 
in the front, in the rear, in the air, on the sea, on the ground and under the ground — 
and we will have all the more reason to adhere to the three-in-one system of com- 
bining the armed forces. It is not only necessary to have a people's army with 
modernized equipment under absolute party leadership. It is also necessary to 
have the cooperation of the broad masses of militiamen. If we have only a regular 
army without the broad masses of militiamen, we will not be able to maintan an 
endless supply of troops and the powerful support of the masses. No matter how 
powerful our field armies are, they will only be like a one-armed general. If we only 
have regional armies and the militia without the field armies, we will be without 
the main structure of a people's war. By opposing and disrupting the army and 
engaging in a "second armed force," Lin Piao and the "gang of four" greatly 
sabotaged army and militia building and the three-in-one system of combining 
the armed forces. While doing a good job in building the field and regional armies, 
we must also do a good job in providing the militia with a solid organizational, 
political and military base, raising militia building to a new level; and developing 
the broad masses of militiamen into a really powerful reserve force for the various 
arms and services which will be able to efficiently attack and wipe out the enemy, 
in cooperation with the PLA units, in time of war. 

Actively defending and luring the enemy in deep are the basic principles of our 
strategy for winning a future antiaggression war. Chairman Mao said that if a 
fi-herman doesn't give any bait to the fish, the fish will not be caught. Resisting 
the enemy outside the country has never been a good method. Our country is a 
socialist country and our socialist system determines that our strategic principle 
should be one of active defense. In dealing with aggressors, we will strike at the 
enemy after we allow him to come in and then strategically gain mastery by 
striking him again. The tricks peddled by Lin Piao and the "gang of four" — such 
as "hooking horns" with the enemy "lock, stock and band" — totally reflected 
the passive defense of resisting the enemy outside the country, a method which 
has long since been criticized. The situation will be reasonable and favorable 
for us and our struggle will be easier only if we allow the enemy to come in and 
then strike at him. Only by doing so can we force the enemy to scatter his forces, 
carry the burden on his shoulders and be encircled and trapped by all the people; 
Only by doing SO can we utilize our strong points to attack the enemy's weak 
points and destroy the enemy troops one after another. However, luring the 
enemy in deep docs not mean allowing the enemy to go wherever he likes; it 
means forcing him to move in the direction we want, organizing a strong defense 
with our priorities well-placed, preventing the enemy from driving deep into 
our areas, lending him to battlefields prepared and organized in advance, and, 

in accordance with actual conditions, concentrating our superior forces on wiping 

out the enemy troops by one one by using Chairman Mao's 10 major principles 
on military affairs. We must adhere to the principle of protracted war. We firmly 
believe that by carrying ou1 an arduous and protracted struggle, we will In 1 able 
to gradually change the balance of forces between the enemy and ourselves, 
carry out a strategic counteroffensive and win final victory. 



119 

Strengthening education and training in army and military science research is 
an important strategic task for improving fighting skills used in a people'8 war 
under modern conditions. Engels pointed out : "With only enthusiasm but without 
training and organization, nobody can win a war." Modern warfare places higher 
demands on the army and militia with regard to organizational and <■< mmand 
abilities and tactical skills. Wielding the big stick of a purely military viewpoint" 
to wantonly attack people everywhere, Ian Piao and the "gang of four" practiced 
out-and-out liquidationism with regard to military training and military science 
studies. We must raise the levels of education and training in order to reach a 
strategic position, increase military science studies, improve the military quality 
and scientific and cultural levels of cadre fighters, and run the army a- a big 
school. It is necessary to comprehensively and accurately study and implement 
Chairman Mao's military thinking and conduct conscientious research on the 
enemy's characteristics and the laws of modern warfare. To meel the Deeds of 
actual war, it is essential to set strict standards for training and place strid de- 
mands on the army, carry out mass military training programs in an extensive, 
down-to-earth w r ay, improve the content and methods of training in light of the 
improvements and most recent developments in military science and techniques, 
and guard against formalism and championship mentality. It is imperative to use 
Chairman Mao's military thinking to systematically adjust and sum up our 
experiences in carrying out army building and combat and in developing advanced 
military science which belongs to China's proletariat. It is necessary to run mili- 
tary academies and schools of all categories well, and to train command and 
technical personnel who are both Red and expert and capable of carrying out 
modern warfare. It is essential to strengthen militia training and actively pro- 
mote a mass campaign for learning military skills. By so doing we will be able to 
achieve an improved state of the military art with which our country's army and 
people can triumph over the enemy. 

Acceleration of the development of national defense science and technology and 
the national defense industry and improvement of weapons and equipment are 
our material bases in increasing the strength of people's war under modern con- 
ditions. We wage just wars and, as long as we bring the potential of available 
weapons and equipment into full play and make flexible use of the strategy and 
tactics of a people's war, we will be able to triumph over better-equipped enemies 
with our inferior equipment. This is our historical experience. However, in the 
present age in which science and technology is developing by leaps and bounds, we 
will be the subject of attack if we do not have modernized and powerful national 
defense strength and do not master all the weapons as well as the struggle tactics 
and methods which the enemy already possesses or may possess. We should quickly 
improve the backwardness of our army's weapons and equipment, caused by the 
sabotage of Lin Piao and the "gang of four," and rapidly carry out a national de- 
fense modernization program simultaneously with the acceleration of national 
economic construction. It is also necessary to pay attention to learning from the 
advanced experiences of foreign countries, effectively improve the weapons and 
equipment of our army, navy, air force and militia and not only have modern 
conventional arms and sufficient ammunition but also improve the quality of atom 
bombs, guided missiles and other sophisticated weaponry and equipment. If our 
army has high political consciousness, masters advanced military scientific theo- 
ries and techniques, has the support of people throughout the country, and possesses 
modern arms and equipment, we will be greatly strengthened and will be more 
confident of defeating the enemy. 

Building our strategic rear into a powerful, solid base area is a reliable means for 
carrying out people's war. In modern warfare, no big differences exist between the 
front and the rear and all areas affected by the war are subject to possible division 
and isolation. This demands that we build the vast rear area into a strategic base 
capable not only of supporting a protracted war but also of fighting the war in- 
dependently. We must thoroughly criticize the crimes of Lin Piao and the "gang 
of four" in undermining our army's construction work and accelerate the revolu- 
tionization and modernization of logistics. In accordance with the principle of 
integrating the army with the people and combining work during peacetime with 
work during wartime, we should quickly build necessary communications, medical 
and health facilities, oil pipelines, maintenance depots and other war-supportive 
projects, gradually increase our reserves of strategic materials and build a firmly 
complete, integrated network in a modern, well-stocked rear base. 

Strengthening the building of people's air defense is a major strategic measure 
for saving oneself and destroying the enemy in a modern war and a development 



120 

of Chairman Mao's concept of people's war under new historic conditions. In the 
face of the stockpiling of guided missiles and nuclear weapons by social-imperialism 
and imperialism and their habitual surprise attacks, we must conscientiously 
improve the building of people's air defense so that in case of war we can conserve 
our strength, minimize losses and avoid confusion, thus smoothly transforming 
the country from a state of peace to a state of war. Lin Piao basically ignored the 
work of people's air defense and "submitted it to the will of god." The "gang of 
four" babbled that "there is still plenty of time to cany out construction projects 
for people's air defense even after a war breaks out." They completely disregarded 
national security and public safety. In light of Chairman Mao's instruction of 
"dig tunnels deep" and the plans of the party Central Committee headed by 
Chairman Hua, we must fully mobilize the masses to persist in the principle of 
self-reliance and hard work. In response to the call for integrating peacetime pro- 
duction with preparedness against war and offense with defense, we must speed 
up the building of people's air defense projects, with good-quality work, not 
only in important cities but in other cities when conditions are available, and in 
vital localities. Future urban construction and capital construction must take into 
full account the strategic requirements of people's air defense. It is necessary to 
build our country's people's air defense s}^stem into an underground "great wall" 
which will provide conditions for people to live, engage in production, defend 
themselves, launch offensives, and carry out tunnel warfare and street fighting 
at the same time. 

Restoring and carrying forward the fine traditions of the political and ideo- 
logical work of our party and army and giving full play to the power of this work 
are important guarantees for winning a future war against aggression, as well as 
for achieving our country's socialist modernization. Political work is the lifeblood 
of our army, the source of its fighting capability and a decisive factor in upholding 
absolute party leadership over the army and preserving our army's proletarian 
nature. A future war against aggression will be the most fierce and most cruel 
war ever. Therefore, our troops will have to have a higher degree of awareness, 
a more heroic fighting spirit, stricter discipline, more centralized, unified purpose 
and closer unity and cooperation. Without powerful political work, it will he im- 
possible to meet all these requirements. Under the new historical conditions it is 
necessary to enable vast numbers of commanders and fighters to always maintain 
a high degree of revolutionary vigilance, overcome a false sense of peace and tran- 
quillity, and always prepare well for crushing the subversion and aggression of 
social-imperialism and imperialism and liberating Taiwan, all this requires greater 
efforts in strengthening political and ideological work. We must thoroughly elim- 
inate the pernicious influence of Lin Piao and the "gang of four" in political work, 
oppose any tendency to weaken this work, conscientiously grasp class struggle 
in the ideological field, straighten things out in every field of work, particularly 
by consolidating the lading bodies, and strengthen political and ideological work 
at the grassroots level so as to promote the fine political work traditions fostered 
by Chairman Mao. We must also persist in the principles of seeking truth from 
facts, proceeding with everything from reality, and integrating theory with prac- 
tice, carry out political and ideological work in all fields to achieve the general 
task for the new period and the various tasks in grasping the key link, running 
the army well and preparing to fight, and make good use of the fine traditions of 
political work in a modern war so that this work can play its dual role of leading- 
all other work and guaranteeing its accomplishment. Only by so doing can we 
successfully put modernization in command of revolutionization; insure a socialist 
orientation in the development of our modernization; train more Lei Feng-type 
cadres and fighters, I lard-Bone 6th Company-type companies and leading bodies 
like the party committee of the 1st Air Force Flight Division; and, along with 
thoroughly improving the army's combat strength, fight a vigorous, awe-in- 
spiring people's war in time of war. 

Chairman Mao repeatedly stressed: "The whole party must pay great attention 
to war, study military affairs and prepare to fight." Stepping up war preparedness 
i- not purely a military event but a major event for the entire party, people 
throughout the country and all national fronts. A powerful national defense is 
I on a Btrong national economy. Only faster development of economic con- 
struction can provide greater progress in the building of national defense, and only 
powerful national defense capabilities can reliably insure the motherland's seni- 
lity and Bmooth realization of the general task for the new period. The working 

Class, pooi- and lower-middle peasants, revolutionary soldiers and intellectuals in 

our country must work hard at their posts to accelerate the realization of the four 

modernizations and expand OUr country's economic and defense; strengths. In 

other word-, they must contribute their share to stepping up war preparedness* 



121 

We will not attack unless we are attacked; if we are attacked, we will certainly 
counterattack. Let the enemy who dares to launch a war of aggression against 
our country have a go at it. The 800 million army men and people <>f cur country 
have long been ready in their battle array. We are armed with Chairman Mao's 
invincible military thought. We have the wise leader Chairman Hna to .-< 
our supreme commander and the party Central Committee and its Military Com- 
mission headed by Chairman Ilua to correctly guide us. We have battle-to 
veteran proletarian strategists and the invincible People's Liberation Army, 
vast numbers of militiamen and people of all nationalities who were tem] 
during decades of war. We have rich experience in vanquishing the enemy through 
people's war and fine political work traditions. We have the sympathy and support 
of people all over the world. No matter when and where the enemy attack- us, we 
will wipe him out lock, stock and barrel. 

Chairman Mao pointed out: "Every just, revolutionary war is endowed with 
tremendous power and can transform many things or clear the way for their 
transformation." If social-imperialism and imperialism insist on imposing a new 
global war on the people of the world, they will spur the world's people to rise 
in revolution. Social-imperialism and imperialism definitely cannot escape their 
destiny — total destruction. Socialism and communism will prevail all over the 
world. 



APPEXDIX F 



Summaries of 1977 Xormalizatiox Hearings Held by the 

Subcommittee ox Asian and Pacific Affairs 

"Normalization With the PRC : Global Implications," September 20, 1977 

SUMMARY OF TESTIMONY 

A. Doak Barnett, Brookings, finds P.R.C.-U.S. relations at a critical juncture 
and is concerned that, unless these relations move forward, they may very likely 
weaken to the detriment of U.S. global and regional interests. 

Barnett sees little hope for a "Two China" policy. Both Peking and Taiwan 
have reiected it and whatever chance it once had disappeared with the admission 
of the P.R.C to the U.N., and its recognition as the Government of China by 
over 100 nations. 

Barnett believes that even after normalization Taiwan can continue to prosper. 
The P.R.C. has made clear its willingness to accept a continuation of non-govern- 
ment United States-Taiwan ties. Moreover, the P.R.C. presently lacks the mili- 
tary capacitv to launch an invasion of Taiwan and in the future it will be deterred 
by the political risk of rekindling U.S. antagonism. The future of Taiwan, he 
asserts, "will take years to decide * * * and will depend essentially on long term 
trends in both China and Taiwan, rather than on what the U.S. does or does not 
do." 

Barnett argues that our future success in arms control and nuclear non-pro- 
liferation negotiations requires the participation of the P.R.C. and that long run 
regional stability likewise requires P.R.C. participation, or at least its acquiescence. 
Thus, "our ability or failure to establish and maintain a viable relationship with 
the People's Republic of China could have a tremendous impact on broad U.S. 
interests * * * and full normalization of relations is clearly a prerequisite for 
establishing a viable relationship". 

Pohert A. Scalapino, University of California, argues that Soviet-American 
relations are, and. for the foreseeable future, will continue, to be of greater im- 
portance to the United States than Sino-American relations. Scalapino cautions 
Hint a policy of aligning with China will "inevitably" result in a deterioration of 
Soviet-American relations and a destabilization of conditions in Asia. 

While emphasizing that a decision to normalize relations with the P.R.C. can- 
not be equated to an alliance, Scalapino warns that a decision on normalization 
must address the question of whether it can be done without damaging United 
States credibility and commitments. Scalapino maintains that, in light of our 
recent experience in Southeast Asia, a decision to break relations with Taiwan 
would be interpreted as signifying a broad scale U.S. withdrawal from Asia and 
raise questions of our credibility and commitments not only within the region, 
but also within an international context. 

Scalapino concludes that the U.S. must make the critical distinction "between 

playing Peking's game of allowing ourselves to be drawn into confrontation with 

i * * * and maintaining an economic, political and military posture that 

assures -ill states of our will and capacities regarding those commitments and 

policies which we believe to be in our interests." 

Allen S. Whih'nr, University of Michigan, cautions against undue delay in 
recognizing the P.R.C. and urges that the normalization process be completed 
before the onset of the next presidential campaign. 

While acknowledging thai all signs indicate a continuation of Sino-Soviot 
antagonism, Whiting wains against ruling out tactical changes in Sino-Soviot 
relations within the next five years, particularly if the current stalemate in 
U.S.- P.R.C. relations continues. 

Whiting emphasizes that normalization is not the end for Taiwan, Tho T P.R.C. 
made clear its acceptance of continued United States — Taiwan commercial- 
economic ties along the lines of the Japanese formula. Moreover, signs indicate 

(122) 



123 

that the P.R.C. is more concerned with the abrogation of the U.S.- R.( >.C. mutual 

defense treaty than with the immediate reintegral ion of Taiwan with the mainland. 
Whiting concludes that, with a well prepared approach to the completion of 
the normalization process, including assurances oi our continuing Buppoii for our 
Asian allies, recognition of the P.R.C. will well serve P.R.C— U.S. relation 
well as regional development and stability. 

Nathaniel Thayer, Johns Bopkins, takes up the attitudes of various 
governments with reference to the normalization of relations between the United 
States and the P.R.C. Thayer (-(includes that the governments of the Philippines, 
South Korea, Thailand, Indonesia, Japan, and Australia all view normalization 
as inevitable, but differ concerning the impact of the decision on the region. 
Australia, the most optimistic. South Korea, the most pessimistic. 

Many of those same governments are concerned with the fate of Taiwan after 
normalization and worried as to how far the United States will go for the P.RJ . 
They place the fate of Taiwan in a context of relations between Large states and 
small states, and watch the U.S. treatment of Taiwan for clues to their own fate* 
should their interests ever conflict with those of a major power. 

Thayer believes that normalization will strengthen the international system. 
At the same time, he also believes that the United States must fully reassure its 
allies with regard to our credibility and commitments. 

Thayer concludes: "We are too big to play big-power politics and ignore small 
states. If anything, we should follow the edict of Chairman Mao and lean to one 
side — the side of small states. That has been our strength in the past. That will 
probably be our strength in the future." 



"China Normalization: Legislative and Legal Implications," September 

21, 1977 

SUMMARY OF TESTIMONY 

Jerome Cohen, Harvard, feels the United States should move as rapidly as 
possible to normalize, but stresses "no one is talking about unconditional normali- 
zation". Cohen feels international law precedents imply that all United States- 
Taiwan treaties and agreements will automatically lapse with withdrawal of 
recognition from the ROC. 

Cohen disagrees with Victor Li (below) that the U.S.-ROC treaties, particu- 
larly the Mutual Defense Treaty, could survive in any form without Peking's 
express permission following normalization. 

"I do not know of any case in which a country that has transferred recognition 
from Taipei to Peking has been able to maintain its treaties with Taipei". The 
Japanese Formula is "an elaborate web of unofficial agreements to replace 
* * * treaties it had previously maintained." 

However, to replace the Mutual Defense Treaty, Cohen feels "* * * the U.S. 
is free to make a unilateral defense commitment through a Presidential state- 
ment * * * or through Presidential-Congressional cooperation." 

Cohen's main point is that normalization is a political decision which, having 
been made, will compel the legal problems to be worked out, and he urges Congress 
to help anticipate the switch by passing the needed amendments and new legis- 
lation in advance. 

Victor Li, Stanford, agrees with Cohen's device of using the "authorities on 
Taiwan" as a method of dealing with the de facto control over Taiwan which 
Taipei will exert even after de jure recognition of Peking as the Government of 
China takes place. 

But, Li strongly disagrees with Cohen's contention that all treaties and agree- 
ments will automatically lapse. Li feels that specific U.S. abrogation — particularly 
of the Mutual Defense Treaty — would not only be required, but would be useful. 

Li wants the United States to give Taiwan the 12-month "notice" required 
by the defense treaty terms so Taiwan could gain time to psychologically adjust 
to what it has to date characterized as a disaster. 

Li feels the problems surrounding the security aspect — and the defense treat}' — 
to be the key to unlocking the political dilemma surrounding normalization. He 
urges "clearing away the underbrush" to focus on the security aspect. All else is 
mere detail, and will follow suit once the political decisions are made. 



124 

Li says the key to breaking the impasse lies in the fact that the Shanghai 
Communique does not require the United States to break the defense treaty, 
only to withdraw troops and recognize the P.R.C. as the Government of China. 
Therefore, by continuing to deal with "the authorities on Taiwan," considerable 
flexibility will be gained in the U.S. bargaining position with the P.R.C. regarding 
Taiwan's economic future. 

Francis Valeo, former Secretary of the U.S. Senate, stresses the political nature 
of the decision, feels it is almost entireh T up to the President, the sole role for 
Congress being the economic enabling legislation, which can be "after the fact." 

Valeo does not feel Senate "approval" of abrogation of the Mutual Defense 
Treat}' is Constitutionally mandated by the fact that the treaty was approved 
by the Senate in the first place. 

Valeo offers a "Draft Joint Resolution on Chinese Relations" he feels will 
simplify the otherwise terrifyingly complex task of amending in detail the laws 
and regulations governing relations, commerce and trade with Taiwan. His resolu- 
tion states: 

1. In any existing provision of law or regulation pursuant thereto, the term 
Republic of China or variations thereon shall be deemed to apply only to the 
territory referred to in Article 6 of the Mutual Defense Treaty (the island of 
Taiwan and the Pescadores). * * * 

2. Notwithstanding any other provisions of law, laws and regulations referred 
to in Sec. 1 of this Resolution shall remain in force for * * * [Taiwan and the 
Pescadores] * * * regardless of the state of diplomatic relations between the 
United States and China unless terminated by Presidential declaration, with 
Congressional approval. 

Eugene Theroux, Washington attorney, China trade specialist, endorses normal- 
ization in the same terms as Victor Li: "the question is not whether, but how." 
But Theroux urges the United States to "confine its negotiations with the P.R.C. 
to the terms on which an exchange of Ambassadors can occur between Washington 
and Peking. In this process, neither side should expect the other to make un- 
reciprocated concessions." 

"The question of Taiwan and its relationship to the mainland of China must 
be left to the Chinese themselves," Theroux urges, noting both the P.R.C. and 
the ROC exercise de facto political authority over their specific territories, but 
not over each other. "The burden is therefore upon those who favor change in 
the status quo to make a convincing case that it is in our national best interest 
in * * *" to go further than exchanging Ambassadors with the P.R.C. 

Theroux says the United States should urge the two parties to meet and directly 
negotiate their differences: the Mutual Defense Treaty "should not be an obstacle 
to progress in their negotiations, since the P.R.C. has indicated its intention to 
resolve the Taiwan question peacefully." 

On the many treaties and agreements between the United States and Taiwan, 
he agrees with Victor Li: "There appears to be no principle of international law 
that withdrawal by one government of political recognition of another ipso facto 
either terminates or continues prior treaties or agreements between them," there- 
fore, Congress and the President must study the situation and act to keep in force 
what they will." 

"Normalization with the PRC: Formulas," September 2S, 1977 

SUMMARY OF TESTIMONY 

Ros* Terrill, Harvard, warns against U.S. "complacency" because U.S.-PRC 
relations are better now than pre-1972. He cites the present lack of opportunity for 
full trade and diplomatic exchange as "frustrating", and inherently damaging to 
1 r.S. hopes of influencing the PRC politically through exchanges of visits, Wash- 
ington-Peking. Consequently, he urges U.S. acceptance of Peking's "Three 
Points", thus officially recognizing the end of the Chinese civil war which we 
presently support by backing the Nationalist regime and its "mission" to liberate 
the mainland. 

However, Terrill emphasizes that "to recognize Peking is not to abandon Tai- 
wan," and that the President or Secretary of State should pointedly visit Taipei 
following recognition of Peking to stress the "essential normalcy" of the United 
States-Taiwanese relationship, particularly regarding trade, and the security issue. 

Terrill noted that a key part of the negotiation process should include strong 



125 

U.S. representations regarding the security of the Taiwan straits (although with- 
out specifically naming Taiwan) adding "if this is unacceptable to the PRC then 

negotiations are dubious anyhow." 

Ten-ill makes the same "do jure" and "do facto" distinctions which charad 
the testimony of other witnesses, adding that the break with Taiwan mm 
positive in nature — the "United States stressing its concern for formulating a ra- 
tional, realistic Asia policy, particularly concerning Japan. 

Ralph Clough, of Brookings Institution, proposes that in negotiating with 
China the United States arrive at an "American formula" which would protect 
its interests in Taiwan, but would not preclude a negotiated peaceful settli □ ent 
of relations between Taiwan and the mainland Chinese. To this end the I 
States ought not accept quickly and without appropriate reciprocal concessions 
Peking's three conditions for normalization. 

As part of the "American formula," economic connections will be significant 
and Clough believes, may depend on political support. Sine the U.S. approaches 
these matters more legalistically than the Asians do, the extremely extra 
Japanese approach will not be workable for the United States. Also highly im- 
portant will be maintenance of consular relations between the United States and 
Taiwan, even after diplomatic ties should be severed. Recognizing that the 
British were unsuccessful in obtaining diplomatic ties with Peking while they 
kept a consulate in Taipei, Clough considers American ties sufficiently more 
valuable to China than the United States would be able to obtain the desired 
arrangement. 

In addition to economic and consular ties, there remains the question of de- 
fense relations with Taiwan. Clough believes the treaty probably must be set 
aside. Defending this action will be difficult because there is no guarantee that 
the mainland would not launch an attack on Taiwan, aside from the military 
and political risks Peking would run if it did so. 

Clough proposes that the "American formula" stop with the Shanghai Com- 
munique regarding the connection of Taiwan with mainland China, leaving that 
question open. Finally, he urges that if the United States accepts Chinese pre- 
conditions, and adheres to the Shanghai Communique concerning Taiwan's 
status, the PRC should be willing to make the concessions necessary to "ensure 
the security and enonomic well-being of Taiwan." Once that is done, there could 
be further progress toward normal relations between the United States and 
China. 

Donald A. Zagoria, Columbia University, argues for a rapid normalization of 
relations with the PRC and believes that a formula can be found which will enable 
the United States to recognize the PRC without sacrificing the interests or se- 
curity of Taiw r an. 

Zagoria believes that the PRC is anxious to prevent any post-normalization 
initiatives by Taiwan in the direction of independence and thus, "in the im- 
mediate future — five to ten years — Peking should be willing to reach an under- 
standing with the United States that will in effect rule out the use of force against 
the island." 

As a substitute for the U.S.-ROC Security Treaty, Zagoria suggests a joint 
U.S.-PR.C statement that "without specifically mentioning Taiwan, commits both 
the United States and the PRC, to the continued maintenance of peace and se- 
curity in Northeast Asia." He further recommends that the United States unilat- 
erally make clear its understanding that the area defined by the joint statement 
does include Taiwan. 

Zagoria concludes that, through the normalization process, the United States 
and the PRC will be able to arrive at an informal security arrangement to replace 
the current U.S. treaty commitment to Taiwan. 

Robert Barnett, the Asia Society, argues that abrogation of the Mutual Defense 
Treaty is in our best interest, because it facilitates recognition of the PRC. 
Contrary to conventional wisdom, however, abrogation is also in Taiwan's interest 
because the securitj^ and stability of the region will be enhanced by a rational 
U.S. policy of full relations with PRC, Barnett argues. 

Barnett feels that maintenance of the treaty will be harmful to the United 
States precisely because of the "credibility" issue some of Taiwan's defenders 
raise. A treaty the United States is not really prepared to support militarily will 
breed "credibility" problems for obvious reasons, as well as raise the question of 
the American ability to assess its genuine national interest (in Europe as well as 
in Asia), he says. 



126 

However, Barnett believes, and the other witnesses agreed, it would be "both 
honorable and sensible" for the United States to make clear to Peking its inten- 
tions for Taiwan regarding trade and security post-normalization. 

Finally, Barnett stresses the importance of the "one China" idea to both 
Taipei and Peking, saying it is a prime factor in allaying U.S. and Asian — particu- 
larly Japanese — fears Peking might resort to force to regain Taiwan. 

A "Chinese solution" to Taiwan's future is the best solution and perhaps a 
"Hong Kong" solution will be in the works, once the United States helps set the 
process on the right road by establishing full relations with the PRC. 



"Normalization With the PRC: The Issue of Taiwan," September 29, 1977 

SUMMARY OF TESTIMONY 

Ray Cline, Georgetown Center for Strategic and International Studies, states 
that in his view there are really two China's today, with distinct cultures and 
separate territories. The Republic of China has the right to exist with de facto 
control of Taiwan, the offshore islands, and the Pescadores, and a population of 
17 million. As a constitutional government, the ROC is essentially representative 
and a comparatively open society. It is economically and defensively viable. 

The PRC in contrast has suffered instability during change of governments, 
marked by intrigue and infighting among hopefuls to the premiership. It has 
taken a hard position on what the United States must relinquish to obtain normal- 
ized relations. Expanded diplomatic relations will not provide an improvement in 
this situation. Americans who have visited the PRC know the limits of contacts 
with Chinese. Secretary of State Cyrus Vance's trip to Peking was not successful, 
according to Vice-Premier Teng Hsiao-p'ing, because in Cline's words, Vance 
"did not bring diplomatic gifts in tribute and kowtow to the rulers of the Central 
Kingdom." Complying with Peking's demand on withdrawal from Taiwan would 
not be favored by the American people. 

The United States cannot expect the PRC to throw its weight into the balance 
against the U.S.S.R. ; to the extreme that China will do so depends on forces 
not influenced by American policy. Further, Chinese military power is not limited 
in everything but man power. Given China's tendencies to be non-aligned in this 
set of relations, it would be futile to expect a strong alliance with China. Mao and 
his followers speak kindly of the United States onh T in contrast to the Soviet 
Union, and Chou En-lai has made it clear that good relations with the United 
States is a tactic, not a long term commitment. 

The Shanghai Communique does not require us to abandon Taiwan, and is a 
"calculated ambiguity," communicating only an agreement in effect that "it is 
desirable to broaden the understanding between the two peoples." Secretary of 
State Henry Kissinger stated hard on the heels of the Shanghai Communique that 
the Mutual Defense Treaty with Taiwan "will be maintained. Nothing has 
changed on that position." It would be erroneous to assume that if the United 
States normalizes relations with Peking on Chinese terms, the ROC's situation 
would not be threatened. And, American credibility with its allies would be 
damaged, popular pronouncements to the contrary. 

In conclusion, Cline strongly emphasizes that the United States must be fair in 
its dealing with Taiwan and mainland China, including a firm adherence to our 
treaty ties with the ROC. Further, we should encourage general acceptance of 
Taiwan as a de facto sovereign state. Something on the order of a German arrange- 
ment, with two sovereign states, would be a reasonable mode 1 !. While there is one 
Chinese civilization, there are two Chinese states. Recognition of this fact is the 
beginning of a policy based on reality, not myth. 

Parris Chang, Pennsylvania State University, offers an "American formula" as a 
means of resolving the current US-PRC deadlock. He proposes that the United 
States recognize the PRC as the government of mainland China and, at the same 
time, maintain diplomatic and security ties with Taiwan on the condition that the 
government of Taiwan proclaims that it is the government of "Taiwan and the 
idores only." 

Chang argues that his "American formula" has several merits. One is that it 
Corresponds to political realities both on the mainland and on Taiwan. Secondly, 
by guaranteeing the independence and security of Taiwan, the United States will 
demonstrate to t he world its concern with the fate of small nations in the planning 
and execution of its foreign policy. Moreover, it may encourage other nations to 
resume diplomatic ties with Taiwan. 



127 

He concedes that his plan initially will be opposed by the V\IC bu1 argues that 
the PRC will "eventually . . . have to come to terms with international realities.' 1 

As for the United States, Chang concludes that: "It is both our moral obligation 
and national interesl to insure the security of Taiwan and not to jeopardize the 

freedom of the people in Taiwan to deride their own political future. 

Harold Hinton, George Washington University, deals with the issues of Taiwan 
and normalization from a Chinese as well as an American perspective. 

China, he points out, has had a long history of not onl\ territorial disunity hut 
also of great flexibility in dealing with territorial disputes. Consequently: "There 
is no reason why Peking in time should not show some flexibility with Taiwan." 

Hinton calls for an understanding between the P.R.C. and Taiwan along the 
lines of "Two Germanics" formula and argues that an understanding will be 
facilitated if the stronger P.R.C. is not in a position to coerce Taiwan. 

However, in the years since the Shanghai Communique, the PRC attitude 
towards normalization has become increasingly inflexible as evidenced by its 
imposition of the three conditions for normalization. This suggests that the PRC 
"is not really serious about normalization, at last in the near future." 

He concludes that the United States is under no obligation to normalize rela- 
tions and advocates a continuation of the current status quo until Taiwan and 
he P.R.C, on their own, are able to define a new relationship. 

Hungdah Chiu, of the University of Maryland Law School, discusses the 
Shanghai Communique, analyzing wmethcr it required American acceptance of 
the PRC's three conditions for normalization of relations. Since the United States 
has repeatedly assured the ROC that such is not the case, that the American 
treaty commitment to Taiwan will be kept, it can only be assumed that the 
Shanghai Communique does not bind the United States to abrogate its ties with 
the ROC. Further, the Department of State has stated that the President alone 
cannot bind the country by an explicit commitment; therefore the Shanghai 
Communique cannot require the United States to abandon a treaty commitment. 

The legal status of Taiwan, according to Chiu, is not necessarily that of an 
integral part of China. Under international and treaty law, Taiwan is not clearly 
a part of China. The ROC does not claim sovereignty over all the mainland. 
Further, Taiwan could legally claim to be "terra delicta," and therefore in a 
position to be independent if it can exert sovereignty over its own territory. While 
the R.O.C. no longer intends to claim the mainland for force, the P.R.C. still 
claims the right to "liberate" Taiwan forcibly. Chiu suggests that in view of 
Taiwan's practical independence this would be contrary to the U.N. Charter. 

With regard to the implications for Taiwan of normalization of U.S.-PRC 
relations, Chiu states that much would depend on the way in which the United 
States retained its connections with the ROC. Chiu suggests a series of possibilities, 
ranging from virtual maintenance of the current arrangement, to the "Japanese 
formula." These would vary in acceptability from the first, which would be pre- 
ferred, to the last, which would seriously affect the ROC's ability to function. Chiu 
concludes by saying that the Mutual Defense Treaty is the cornerstore of Taiwan's 
relations with the United States, and that stability in the Far East would be 
disturbed if the treat}' were terminated. 






APPENDIX G 



American Bar Association Delegation 

[The following report was prepared by Gerald Lepp, a Council Member, Section of 
International Law, American Bar Association. Mr. Lepp was a member of an ABA delega- 
tion in Cbina at the same time as CODEL Wolff, and bas kindly given permission for bis 
report to appear at tbis point.] 

Members of ABA Delegation 

A delegation of 12 from the American Bar Association (ABA) was invited by 
the Chinese People's Association for Friendship with Foreign Countries (Friend- 
ship Association) to visit China for two weeks to make contacts and exchange 
views with various organizations and departments on legal questions of interna- 
tional trade and other topics of mutual interest. 

The invitation reflects both the changed Chinese internal developments of the 
last 18 months as well as an element in China's current program to improve its 
relations with the United States. 

The Chairman of the Delegation was William B. Soann, Jr., President of the 
ABA from 1977-78. Others included S. Shepherd Tate, the current ABA President; 
Leonard S. Janofsky, President-Elect ; Chesterfield Smith of Florida, ABA Presi- 
dent during the Nixon impeachment proceedings; Bert H. Early, ABA Executive 
Director; and John P. Bracken, Past ABA Chairman, House of Delegates. Chief 
Justice Vincent L. McKusick of the Maine Supreme Court and Judge Cecil F. 
Poole of the U.S. District Court, California, represented the American judiciary. 
Professors Ruth Ginsberg, Columbia Law School and Don Wallace of George- 
town Universal Law School were also members of the delegation. My qualifica- 
tion was both as in-house legal counsel for a multinational corporation and special- 
ist in maritime and commodities arbitration. Attorney Stan Lubman, who 
specializes in Chinese business transactions acted as secretary of the delegation. 

Itinerary 

The delegation visited Peking, Shanghai and Hangchow. Peking is the political, 
cultural and spiritual center of China and home to seven million people. All 
Foreign embassies are located here. Peking is the headquarters of all China's 
major agencies concerned with foreign trade, including the Ministry of Foreign 
Trade, Bank of China, the China Council for the Promotion of International 
Trade (CCPIT) and China's eight Foreign Trade Corporations (FTCs). 

Shanghai is one of the three municipalities under the direct jurisdiction of the 
central government of the People's Republic of China. It has an integrated 
industrial base as well as one of China's main ports for foreign trade. Its total 
population is 10.8 million. 

Hangchow is a resort area. To the west of the city is West Lake which became 
famous for its scenic beauty as early as Tang Dynasty. 

Peking University Law Department 

The Peking University Law Department was reopened within the past IS 
months. During the Cultural Revolution it had been closed as had law depart- 
ments in four other universities and political legal institutes. With the smashing 
of the "gang of four" and Lin Piao the Legal departments and institutes have been 
reopened. 

Members of the Peking faculty are currently engaged in revisions and codifica- 
tions of the civil and criminal law, procedure and environmental protection laws. 
Members of the faculty were engaged in the drafting of the new constitution. 

The present enrollment in the law department is 300 students and faculty and 
stafi' of about 100. 

(128) 



129 

There are no full-time lawyers in China hut only part-time lawyers. Members 
of the faculty from time to time act as Lawyers and represent individuals in 

criminal cases and family matters. 

A defendant in a criminal action may either defend himself or he defended by a 
member of his working unit, neighbor or part-time attorney. 

Prior to 1956 full-time lawyers and lawyer associations existed. We were told 
that law clinics were closed because of their non-use. An alternative explanation 
was the use of legal clinics by private citizens was significant enough to cause 
alarm to the authorities. 

The new Constitution adopted March 8, 1978, is of major importance since it 
makes clear for all Chinese people their role in the post-Cultural Revolutionary 
period. Emphasis is upon three aspects: (1) Class struggle, (2) production, and 
(3) scientific progress. The functions and tasks of State Councils and National 
People's Congress are more explicit than in the past as well as their relationships 
to each other. 

Respect for the law is a basic tenet. The new Constitution restored the practice 
of having a procuratorial department separate from the public security depart- 
ment. The "gang of four" had advocated "smashing the public security organs, 
procuratorial organs and people's courts." 

Law, Politics, Privacy 

The Chinese believe there is no need for lawyers because everyone is aware 
of the law. Every week for several hours small units of neighbors, workers and 
housewives meet to discuss problems of their particular units. All Chinese are 
included in one of these study groups. These discussions will include a particular 
individual's conduct, family disputes, neighbor disputes, family planning priorities. 
Deviations by individuals in the group from accepted political orientation will he 
discussed with a view toward reforming the deviant. Individuals are urged to 
evaluate their own conduct at these meetings (self-criticism) and to reform them- 
selves. 

Although crime does exist in China, it is nowhere near the proportions existing 
in the U.S. Minor disburbances which in the U.S. go unnoticed will be discussed in 
China by the neighborhood unit and the particular individuals urged to correct 
their ways. 

Privacy is virtually unknown. For example, neighborhood medical clinics, 
staffed by para-professionals (barefoot doctors), post a chart on the clinic's 
wall showing the menstrual cycles of the neighborhood women as well as the 
birth control device they use. Neighborhood units have a quota for newborn 
children and the neighborhood will decide which family is to have the children. 
Families are limited to two children and preferably one child. The consequences 
of more than two children are not clear, but it seldom happens. 

The people appear to be healthy, well fed, adequately clothed and housed. 

China Council For Promotion of International Trade (CCPIT) 

One of the organizations of China's Ministry of Foreign Trade is the CCPIT, 
whose function is trade with non-socialist countries including those having no 
diplomatic relations with Peking. The CCPIT represents China's Foreign Trade 
Organizations in these foreign countries as well as sending trade delegations, 
receiving foreign delegations, participating in international trade fairs and collect- 
ing and disseminating information concerning international trade. 

We met with Jen Tsien-Hsin, who is the head of the Legal Department of the 
CCPIT. He is also Secretary General of the two arbitration commissions within 
the CCPIT, namely, the Foreign Trade Arbitration Commission (FTAC) and 
Maritime Arbitration Commission (MAC). 

The work of the CCPIT Legal Department includes general average adjustment, 
trade mark registration, legalization and certification of documents and research 
on foreign trade and maritime law. 

Arbitration 

CCPIT stresses settlement of disputes through friendly negotiation and settle- 
ment, or conciliation. The two arbitration bodies are concerned only if one of the 
parties is foreign. Disputes between two Chinese parties are settled by economic 
commissions at all levels. 



130 

The main feature of Chinese arbitration procedure is a combination of arbitra- 
tion with conciliation. Before the formation of an arbitration tribunal, the CCPIT 
attempts to settle disputes!)}' conciliation. Subsequently, the tribunal will attempt 
to conciliate the dispute. In Chinese view, most of the cases can be settled by 
conciliation. 

In 1977 — Joint Conciliation by CCPIT and AAA of disputes arising in trade 
between the U.S. and China was proposed. AAA proposed a Joint Commission 
and procedure for joint conciliation. Although CCPIT thinks the idea of a bilateral 
arrangement is a good one, CCPIT believes there is not sufficient experience for 
a written agreement to be negotiated. 

Choice of law — In the Chinese view, each party prefers that the law of his 
country be the applicable law in any arbitration. Accordingly, Chinese arbitration 
commissions will consider the following three sources of appropriate applicable 
law and principles: (1) Chinese law and law of other contracting party, (2) con- 
tract terms (3) international practices. 

Criminal Trial 

We attended in Peking the trial of defendant, Ri Chun Yuan, a 28 year old man 
accused of several thefts of amplifiers and TV sets from his employer, the Capital 
Auto Rental Company, and from a nearby police box. All the items stolen, worth 
about U.S. $1,000 were recovered. 

The panel consisted of Chief Judgre Wang Chi (a woman) of the Intermediate 
People's Court of Peking, and two People's Assessors, one a Cadre (Staff) in the 
Peking General Rubber Plant and the other a worker at the defendant's work 
place, who had been invited by the Court. The Secretary of the Court made a 
verbatim transcript. 

The prosecution's case was presented by a man and woman from the Peking 
Municipal Public Security Bureau. Neither was a lawyer. 

At the defendant's request, he was represented by two part-time lawyers who 
were also lecturers at the Law Department of Peking University. 

Three hundred people attended the trial, including workers from the defendant's 
unit, neighbors, friends and the public. 

The defendant had confessed his crimes to the Public Security Bureau and also 
to the responsible person (leader) of his work unit. The defendant had not been 
represented by counsel. 

Prior to the trial, the Public Security Bureau had conducted an investigation, 
interviewing witnesses, workers at defendant's place of employment, as well as 
interviewing his neighbors. 

The most important mission of the Chinese criminal process is to implement the 
policies of the Chinese Communist Party. When Party policy changes, the laws 
must be changed to reflect the new policy. At the trial, the defendant and his 
part-time attorneys emphasized that defendant had been misled by the policies 
of the gang of four. 

A principle of sentencing is leniency to those who confess their crimes and 
severity to those who resist. Chinese criminal process seeks to reform and rein- 
tegrate the offenders into the socialist society. The offender is urged to repent and 
to I"- re-educated. 

At the trial, the defendant had the right if he chose to challenge members of the 
Court. He accepted the court panel. He described for the Court his life history. 
His parents and two of his brothers were workers in Peking. He described how he 
had taken the stereo equipment and TV's from his employer. He pointed out 
however his brother and not he had taken a particular amplifier. The defendant 
wanted to build a hi-fi set and tv for himself but didn't have sufficient money. He 
feared detection by his parents and disassembled the items he had taken and hid 
them under his bed. 

Following the defendant's testimony, the Court read written statements from 
several witnesses including the Party Secretary at the Capital Car Company and 
the statement of defendant's prior good character by Party Secretary of the 
neighborhood. 

Defendant's part-time lawyers did not cross examine any of the witnesses, 
although they were given an opportunity. 

The defense lawyers did not question his confession but emphasised that de- 
fendant had served in the army receiving commendations on three occasion-. lb 
had never taken anything before. He had returned all of the items taken. Tin* 
defendant had been badly influenced by the gang of four, but now had voluntarily 
confessed his crimes and was repentant. 



131 

Following the open hearing, defendant and the witnesses exited the courl room. 
the three judges left their scats on the raised court bench, and took seats a1 tie- 
front of the audience. Members of tie- audience were now invited to comment on 
the evidence as well as to recommend an appropriate sentence. The consensus was 

the crime was serious because it involved the theft of State property. Sine* 
defendant was young, had confessed and was repentant, and apparently had been 
misled by the disrespect to law and order at the time of the gang of four, a two-year 
sentence' was recommended. In fact, defendant was sentenced to two years of 
imprisonment. 

Modernization, Agriculture, Ceroilfoods 

China has set a goal of modernization by the year 2000. The four modernization- 
emphasized are: agriculture, industry, national defense, and science and tech- 
nology. 

Priority should be given to agriculture as the foundation for all development. 
Unless agriculture production rises, industry cannot respond. The Chinese have 
set as their production goal for 1985, 400 million tons of grain. 

Chairman Hua has stated that "* * * All provinces must endeavour to become 
more than self-sufficient in grain and ensure an all-round development of agri- 
culture, forestry, livestock breeding, side-occupations and fishery. 

Our delegation visited Changcheng (Long March) People's Commune in Peking. 
The Commune is principally engaged in the production of vegetables plus some 
small industry. The commune is divided into production teams (twenty to thirty 
families) and brigades (several production teams make up a production brigade). 
In addition to commune owned farms, each family has a very small private plot 
whose production can be consumed by the family or sold outside the commune 
at a fair for that purpose. 

In Peking, I met with Shih Yun Ching, Deputy Manager, Import Department 
of the China National Cereals, Oils and Foodstuffs Import and Export Corpora- 
tion (Ceroilfoods). Since I was a Continental executive, I was welcomed as a 
friend of China. However, I was the first attorney to meet with him and he asked 
whether there were any problems. I assured him this was a visit by another friend 
and no particular problems to be discussed. 

Commercial contracts are drawn by the merchandisers of Ceroilfoods. No per- 
son within that organization was identified either as a lawyer, legal expert, or 
contract specialist. The import manager was familiar with standard commodities 
contract such as GAFTA and NAEGA. These forms are not used by CEROIL- 
FOODS. I was told that with friends such as Continental, special contracts are 
negotiated. 

I presented several publications and articles concerning GAFTA and NAEGA 
standard form contracts and arbitration procedure. I was told that among friends, 
the Chinese settled disputes and seldom referred differences to arbitration. 

Normalization 

The Chinese have stated three requirements for full diplomatic relations 1 >e- 
tween the U.S. and China (normalization), namely: (1) U.S. recognition that 
Peking is the exclusive representative of China; (2) terminating the Mutual De- 
fense Treaty of 1954 between Taiwan and the U.S.; and (3) withdrawal of all 
U.S. forces from Taiwan. (In fact, only a small number of American military 
personnel remain on Taiwan. The Military Assistance Advisory Group is being 
phased out.) 

In the Shanghai Communique of 1972 signed by President Nixon and Premier 
Chou En-lai, the L T .S. acknowledged that "there is but one China and Taiwan is 
a part of China * * * "(The U.S. reaffirmed) its interest in a peaceful settlement 
of the Taiwan question by the Chinese themselves. With this prospect in mind, 
(the U.S.) affirms the ultimate objective of the withdrawal of all U.S. forces and 
military installations on Taiwan as the tension in the area diminishes." Both 
parties agreed in the Communique that "progress towards the normalization of 
relations between China and the U.S. is in the interests of all countries." 

Our delegation met with our host, Wang Ping-Nan, President, Chinese People's 
Association For Friendship with Foreign Countries. He had been an associate 
of Chou En-lai and Chinese Ambassador to Poland. Ambassador Wang stated 
China seeks peaceful relations with the U.S., based on five principles, namely, 
(1) mutual respect, (2) non-interference, (3) non-aggression, (4) mutual benefit 
and (5) peaceful coexistence. 




UNIVERSITY OF FLORIDA 

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Ambassador Wang stated that the status of Taiwan is an internal matter. 
Traditionally the Chinese have said that they would liberate Taiwan by force. 
However, Ambassador Wang noted that in July Communist Party Vice Chairman 
Teng Hsiao-Ping said to U.S. Representative Lester Wolff that the Chinese 
would negotiate directly with the Nationalists. On two prior occasions the Com- 
munist Party and the Kuomintang (Nationalist Party) had cooperated. Ambassa- 
dor Wang stated that China has taken notice of the U.S. economic interests in 
Taiwan. After normalization, China will not place restrictions on contracts 
between the U.S. and Taiwan. Ambassador Wang suggested that the U.S. follow 
the example of Japan and end diplomatic relations with Taiwan but continue 
trade relationships informally. 

Subsequently, we visited the Great Hall of the People in Peking and met Vice 
Premier Chi Teng K'uei, who is a political hardliner. He stated that the Mutual 
Defense Treaty was like China making a defense treaty with the State of Texas. 
He asked how the U.S. could ignore 900 million Chinese. 

He was reluctant to recall the past but remembered the U.S. had aided Chiang- 
Kai-shek with $6 billion of military equipment. Chiang Kai-shek had lost the 
war, but nonetheless, the U.S. failed to establish diplomatic relations with China. 

Mistakes of the past can be corrected, he said. When Dulles was Secretary of 
State, China was blockaded by the U.S. The Vice Premier spoke favorably of 
recent communication between the U.S. and China. However, he recalled that in 
1975, when China planned to send its Performing Arts Group to the U.S. the 
trip was cancelled by the Chinese because they were not permitted to sing "Taiwan 
Comoatriots." 

The Vice Premier continued that the social systems of the two countries were 
different — the U.S., a developed capitalist country and China, a developing 
socialist country. Under U.S. law, private property is inviolable. In China, 
public property is inviolable and the government is entitled to confiscate private 
property. 

In China there is mass democracy with the right of 95% of the people to criticize 
and to write wall posters. However, 5% of the people have no rights. These people 
are landlords, rich peasants who refuse to transform themselves and counter- 
revolutionaries. In China, all legal institutions are instruments of the proletarian 
revolution. Legal institutions are not intended to protect the reactionary class. 

For final emphasis, the Vice Premier stated that China had no intention to 
export its legal system, nor did it desire to import that of the U.S. 

Other Places Visited 

The delegation also visited in Peking, the Bank of China, the Institute of Law 
of the Chinese Academj^ of Social Sciences, and the Peking Municipal Peoples 
High Court. In Shanghai we visited the prison, the District Court, and toured 
one of the Shanghai residential areas. In each of the cities, we were hosted to 
banquets by the Friendship Association and we in turn gave banquets in their 
honor. The food was excellent and varied. We visited the Great Wall, Ming 
Tombs, Forbidden City, and Summer Palace. We heard a concert performed with 
traditional Chinese instruments. All in all, it was an interesting tour, packed 
into sixteen days. 

The following is a list of key persons I met with in China during my recent visit: 

(1) Chi Teng- K'uei, Vice Premier (Public Security and Law), Peking. 

(2) Wang Ping-nan, President, Chinese People's Association for Friendship 
with Foreign Countries, Peking. 

(3) Shih Yun Ching, Deputy Manager, Import Department, China National 
Cereals Oils and Foodstuffs Import and Export Corporation, Peking. 

(4) Han Yu-t'ung, Director of the Law Institute Academy of Social Sciences, 

Pekin of . 

(5) °Jen Tsien-hsin, Legal Affairs Director, China Council for Promotion of 
International Trade, Peking. 

(0) Ambassador Leonard Woodcock, United States Liaison Office, Peking. 

(7) Stapleton Roy, Deputy Chief of Mission United States Liaison Office, 

Peking. 

(S) William Wayt Thomas, Jr., Chief, Commercial/Economic Section, United 
States Liaison Office, Peking (Telephone 522033-215). 

o